What will happen to US house prices in 2024?

A panel of housing experts anticipates continued growth in home prices, though at a slower pace than in recent years, according to the latest Fannie Mae Home Price Expectations Survey (HPES).

The panel has upgraded its Q1 2024 projection to a 3.8% rise in home price growth this year and 3.4% in 2025 – a more optimistic outlook compared to last quarter’s expectations.

The forecast stems from a combination of factors, including persistent housing supply shortages and the potential for lower mortgage rates. About 41% of those surveyed cited these factors as reasons for believing that prices are more likely to rise than fall.

“On average, our panelists continue to expect home price growth to decelerate this year, but their overall outlook was revised upward this quarter, with most now reporting greater upside risk to home prices than downside risk,” Hamilton Fout, vice president of economics at Fannie Mae, said in the report.

Should mortgage rates reach the panel’s predicted median of 6% by the end of 2024, experts believe this would further support continued home price growth.

“This is a positive outlook for those who already own a home, but as the dearth of listings boosts both prevailing values and expected future prices, the affordability concerns of prospective homebuyers are unlikely to fade soon,” Pulsenomics founder Terry Loebs added.