According to a new survey panel from Fannie Mae, a survey of national housing experts expects annual national home price growth in 2024 to lie somewhere around 2.4% during the 2024 calendar year and 2.7% in 2025.
This information comes to us from the fourth quarter Home Price Expectations Survey (HPES)—which was conducted by Pulsenomics, LLC.—which polls over 100 highly-placed and senior experts across the housing and mortgage industry and academia for forecasts of national home prices changes in each of the coming five calendar years, as measured by Fannie Mae’s Home Price Index (HPI).
On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4% and 2.7%, respectively. Complete results of the Q4 2023 survey can be found here.
With mortgage rates experiencing significant volatility as of late according to Freddie Mac, this quarter's HPES also asked panelists about their long-run interest rate expectations, as well as their opinions on potential drivers of mortgage rates in the future. The average respondent expects the 30-year fixed rate mortgage rate to eventually settle to an average of approximately 5.7%.
"The survey panelists expect home price growth to decelerate in the coming years, following 2023 price growth that proved more resilient than many anticipated," said Doug Duncan, Fannie Mae SVP and Chief Economist. "Some, including us, had expected the rapid and significant rise in mortgage rates in 2023 to have dampened purchase demand further than it has, putting more downward pressure on home prices this past year than what appears to have occurred.”
“Looking beyond the recent volatility in mortgage rates, panelists expect future rates to decline meaningfully from the recent highs of 8%,” Duncan continued “This would obviously provide improved affordability for potential homebuyers, although anyone expecting the return of the extremely low-rate environment from 2020 to 2022 will likely be disappointed. The panelists also revealed that they anticipate other factors will impact long-term interest rates, including demographic trends, expanding fiscal deficits, the evolution of artificial intelligence, and the green energy transition."
"Panel-wide, the average expected home price growth rate for 2023 jumped to 5.9%, which is a significant increase from the 3.3% level recorded in the previous survey conducted by Pulsenomics," said Terry Loebs, Founder of Pulsenomics. "However, a large majority of the surveyed experts do not foresee this momentum carrying over into 2024—an encouraging consensus for aspiring homebuyers as we approach the new year."
Click here to view the HPSE in its entirety.