After more than two years of stiff competition and fast-rising prices, the U.S. residential housing market experienced a rapid cooldown throughout the latter half of 2022 and the early months of 2023. Despite recent signs that market conditions could be heating up again, 2023 marked a notably more subdued year for U.S. real estate compared to the preceding years.

After a nearly 50% surge in home prices during the first two years of the pandemic, many buyers now find themselves unable to afford property. Inflation in other sectors has made it more difficult to build up the savings needed to buy a home. On top of this, higher interest rates have increased borrowing costs, limiting budgets for many buyers—especially first-time buyers without existing equity or sizable down payments. These combined factors significantly decelerated market activity.

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