Expert Panel Sees Home Price Growth Easing in 2024 and 2025 as Home Listings Trend Upward

By klrw460 June 6, 2024

WASHINGTON, DC – After a 6.6% increase in home prices in 2023, housing experts predict a national home price growth of 4.3% in 2024 and 3.2% in 2025. These projections come from the Q2 2024 Fannie Mae (FNMA/OTCQB) Home Price Expectations Survey (HPES), in collaboration with Pulsenomics, LLC. The survey, which gathers forecasts from over 100 housing and mortgage industry experts and academics, measures expected changes in national home prices over the next five years using the Fannie Mae Home Price Index (FNM-HPI).

The panel’s latest predictions show an increase from last quarter’s 3.8% forecast for 2024 but a decrease from the previous quarter’s 3.4% forecast for 2025. Additionally, the 30-year fixed mortgage rate is anticipated to end 2024 at 6.6%, a significant rise from the previous quarter’s forecast of 5.9%. Despite generally increasing mortgage rates, 84% of respondents believe that homebuyer and home-seller sensitivity to the “lock-in effect” is decreasing, leading to more for-sale home listings. Many expect that any easing of this effect will result in a “somewhat” or “significant” slowdown in home price growth. Full results of the Q2 2024 HPES are available here.

Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist, noted, “The rise in mortgage rates in 2024 and continued above-trend home price growth are making home purchase affordability more challenging. However, the increase in listings suggests more homeowners are moving despite these challenges. We anticipate that the ongoing affordability issues will slow the conversion of new listings into sales. The expert panelists predict a modest decline in mortgage rates throughout the year and see the ‘lock-in effect’ weakening, which should gradually increase for-sale listings and moderate home price growth.”

Terry Loebs, founder of Pulsenomics, added, “The slowdown in home price growth and easing mortgage rates provide some hope that the peak of the housing affordability crisis may be behind us. However, the significant price surge since early 2020 presents a substantial challenge, keeping many aspiring homeowners on a slower path to homeownership.”

For email updates on future HPES releases and other economic and housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

The opinions, analyses, estimates, forecasts, and other views expressed by Fannie Mae’s Economic & Strategic Research (ESR) Group, Pulsenomics, LLC, and the surveyed experts should not be seen as indicators of Fannie Mae’s business prospects or expected results. These views are based on various assumptions and are subject to change without notice. The ESR Group’s opinions, analyses, estimates, forecasts, and other views are based on reliable information but do not guarantee accuracy, timeliness, or suitability for any particular purpose. Changes in assumptions or underlying information could lead to materially different results. The views expressed by the ESR Group are as of the date indicated and do not necessarily reflect those of Fannie Mae or its management.

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