Housing market will NOT crash in 2023 - but correction is in store expert warns 

The housing market will not crash this year but sellers may have to put more 'realistic' price tags on their homes, a real estate expert has warned. 

Las Vegas broker Craig Tann claimed a 'correction' to the property industry was in-store after two years of record low interest rates and skyrocketing house prices. 

It comes after a turbulent few months for homeowners, which saw mortgage rates swell to a 7.2 percent high at the end of October before dropping back down to just over 6 percent now.

Tann, who owns the agency Huntington & Ellis, believes the market is set for a necessary rebalance across demand, inventory, buyers and sellers.

Las Vegas real estate broker Craig Tann says housing market will not crash in 2023 but correction is in store for demand, inventory, buyers and sellers

A graphic showing the change in 30-year mortgage rates across the US between September 2022 and January 2023

He told Dailymail.com: 'Confusion has begun to swarm the real estate industry. 

'For those that have never experienced these conditions before, it creates uncertainty and many have posed questions around the market’s future; is it cooling or crashing?

 'We are seeing a balance of these extremes. 

'The market is missing the necessary indicators of a crash and is instead showing signs of correction.'

However, he added that homeowners may have more difficulty selling their homes.        

'Sellers looking to spark buyer interest may have to price their homes at a realistic and more attractive number than from the previous market,' Tann said. 

The housing market was set alight during the pandemic as the rise in people working from home saw families prioritize bigger properties with more outdoor space.

Pictured: A couple of people being shown round a property (file photo)

Savings accrued during lockdown and federal support schemes also boosted household incomes, helping more people onto the property ladder. 

It fast became a sellers' market while buyers faced high competition and eye-watering prices. 

But a post-pandemic global economic slump has had a knock-on effect, prompting interest rates to shoot up - though they are slowly beginning to climb back down.

Pictured: Meeting about finances (file photo). The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) dropped to 6.23% from 6.42%, with points decreasing to 0.67 from 0.73 (including the origination fee) for loans with a 20% down payment

The average rate for a 30-year fixed-rate mortgage with conforming loan balance ($726,000 or less) currently stands at 6.23 percent. 

Last year rates were typically below 4 percent.  

But today there was good news for homeowners as mortgage application volumes shot up by 28 percent last week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index.

According to Tann, this is a a natural result of prices starting to decline.

He said: 'Since prices have shifted to become significantly more attractive than they were last year, buyers may begin to reenter the market to take advantage of prices we have not seen in years.'

The market, however, is not seeing any surge in inventory.

The number of active listings is about 21% higher than it was a year ago, according to Redfin, a real estate brokerage.

That is largely due to homes now staying on the market longer, with far fewer sales.

New listings of homes for sale have decreased 22% year over year.

It comes after other experts told Dailymail.com that some states would fair better than others as the market rebalances itself. 

 Redfin chief economist Daryl Fairweather said cities like Austin, Phoenix and Las Vegas may see property prices fall but homes in the Northeast and Chicago could gain value.