The housing market has been a rollercoaster in recent years, with skyrocketing prices followed by whispers of a potential correction. To get a glimpse into what’s next, we can turn to the experts. The latest Fannie Mae Home Price Expectations Survey (HPES) offers valuable insights into what housing market analysts are predicting for 2024 and 2025. We discuss more below.
A shift in home price expectations
Get ready for a downshift. After a blistering 5.9% growth projected for 2023, the HPES panel expects a significant slowdown in national home price appreciation. The average forecast for 2024 is a modest 2.4%, followed by a slightly higher 2.7% in 2025.
This deceleration reflects a confluence of factors, including rising mortgage rates, a cooling economy, and ongoing supply chain issues. Higher borrowing costs are making homes less affordable for many buyers, leading to reduced demand and slower price growth.
Regional variances for home price expectations
The slowdown won’t be uniform across the country. The HPES survey reveals significant regional disparities in home price expectations.
- Mountain West: The hottest markets are expected to be in the Mountain West, with states like Idaho and Montana forecast to see home price growth exceeding 5% in both 2024 and 2025.
- Sun Belt: Sun Belt states like Florida and Arizona are also projected to experience above-average growth, albeit at a more moderate pace than the Mountain West.
- Northeast and Midwest: In contrast, the Northeast and Midwest are expected to see slower price appreciation, with some areas potentially experiencing flat or even declining prices.
If you’re a homeowner, the HPES suggests that your property value will likely continue to appreciate, albeit at a slower pace than in recent years. However, the regional variations highlight the importance of understanding your local market dynamics.
For potential buyers, the lower price growth forecasts may offer a glimmer of hope for more affordable housing options in the future. However, it’s important to remember that mortgage rates are still significantly higher than they were a year ago, which could still impact affordability.
As always, whether you are buying or selling, it is highly advisable to consult a local and knowledgeable real estate agent. If you are in the South Florida area and looking to buy or sell a home, we can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.