Anticipating Home Price Trends in 2024–Insights from Various Forecasts

Despite high mortgage rates curbing demand last year, the resilience of U.S. home prices, which continued to rise at a modest rate, aligns with historical norms. How did home prices manage to ascend in 2023 amidst strained affordability and a drop in existing home sales to their lowest since 1995?

The key lies in the balancing act between reduced housing demand, precipitated by soaring mortgage rates in late 2022, and a market characterized by low foreclosure rates and scarce inventory levels.

“Supply dipped alongside demand, providing stability to home prices. Demand remains steady, not showing signs of decline,” says Tejas Joshi from Yieldstreet, highlighting the sustained support for housing prices.

As the pivotal season for housing approaches, promising a spike in activity and potential price increases, here’s an updated compilation of 2024 home price predictions, revealing a slight uptick in optimism compared to earlier forecasts.

Here’s a snapshot of 15 national home price predictions for 2024:

• Home.LLC: Predicts a 5.5% increase, with scenarios ranging from 4.0% to 7.0%.
• The AEI Housing Center: Anticipates a 5.0% rise in home prices.
• Goldman Sachs: Now expects a 5.0% increase, with a subsequent 3.7% rise in 2025.
• The Mortgage Bankers Association: Forecasts a 4.1% increase, with steady growth through 2026.
• Zillow: Projects a 3.5% increase from December 2023 to December 2024.
• Fannie Mae: Predicts a 3.2% rise, followed by a modest 0.3% in 2025.
• Freddie Mac: Estimates a 2.8% increase, continuing with 2.0% in 2025.
• CoreLogic: Expects a 2.5% rise between November 2023 and November 2024.
• Wells Fargo: Foresees a 2.5% increase in 2024, accelerating to 4.5% in 2025.
• HousingWire: Predicts a 2.33% rise, influenced by Treasury yield movements.
• The National Association of Realtors: Expects a modest 1.4% increase in 2024.
• Redfin: Anticipates the median sale price of existing homes to remain stable.
• Moody’s Analytics: Projects a slight 0.4% decrease through the end of 2024.
• Realtor.com: Forecasts a 1.7% decline in median existing home prices.
• Morgan Stanley: Predicts a 3.0% drop, with potential scenarios ranging from -8% to +5%.

On average, the consensus points to a 2.2% rise in home prices for 2024, marking an increase from the previously estimated 0.8%.

Overall Outlook

While there aren’t many direct price predictions, market dynamics suggest regions with significantly low inventory levels may experience price appreciation this spring. Conversely, areas, where inventory has normalized, might see limited growth or potential price declines once the off-peak season returns.