ORANGE, Calif.—As the Federal Reserve continues to raise interest rates, economists say it would significantly lower demand in the housing market and impact local home prices.
According to the semiannual economic forecast released by Chapman University, economists predict Orange County’s median home price would fall by 12 percent down from $1,012,000 in mid-2022 to $891,000 a year after.
Average home prices are heavily dependent upon mortgage rates and housing appreciation will continue to decline for all four quarters of next year, according to the report.
Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research and economics professor at Chapman, said he expects the 30-year fixed mortgage rate to reach 6.5 percent by the end of this year and can only go higher in 2023….