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Over 100 housing market experts surveyed by listings portal Zillow expect the nation’s median home price to bottom out over the course of this year as buyers’ inability to afford current prices and mortgage rates severely curtails demand.

Zillow commissions survey firm Pulsenomics to regularly poll America’s leading housing experts and economists. The latest survey, conducted Dec. 5-12, had 117 responses.

An average of economists’ survey responses showed an expected 1.6 percent fall in home prices through December. The company said its in-house forecast expects the largest declines in home values to occur in expensive California markets.

The same average of economists’ responses predicts only 4.2 million home sales nation-wide. That would be slightly up from the sales pace in November and December 2022, but significantly down from last year’s total of roughly 5 million home sales.

“The housing market is resetting. Though we’re seeing early signs of renewed buyer interest early this year, prices should generally flatten out in 2023, helping buyers to catch up,” Zillow senior economist Jeff Tucker said in a statement. “The sheer number of people in the first-time homebuyer age range and a lack of inventory should limit price declines. A return to more normal growth would be welcome after the rollercoaster ride that home prices have been on lately.”

The panel also expects mortgage rates to trend downward after the first quarter, even as the average interest rate on a 30-year fixed-rate loan hit 6.65 percent last week, a three-month high according to Freddie Mac.

Nearly two thirds of the experts Zillow and Pulsenomics surveyed said Asked when rates for 30-year fixed loans will be at their highest this quarter. Zillow said the median respondent projected a 6 percent rate for 30-year fixed-rate mortgages at the end of 2023.

“The majority of experts are now predicting an outright decline in U.S. home prices in 2023,” Terry Loebs, founder of Pulsenomics, said in a statement provided by Zillow. “Although mortgage rates have moderated and are expected to remain close to the 6% level at year-end, the 2022 rate spike – and the record-high mortgage costs it ushered in – continues to shake home price expectations and market psychology.”

While this year will be a tough one for the market, in the eyes of Zillow’s panel, respondents believe home prices will resume rising in 2024 at an average of 3.5 percent through 2027, typical of the era before the last two housing booms and busts in the 1990s.