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

WASHINGTON, DC – Following home price growth of 6.6% in 2023, a panel of housing experts forecasts annual national home price growth of 4.3% in 2024 and 3.2% in 2025, according to the Q2 2024 Fannie Mae (FNMA/OTCQB) Home Price Expectations Survey (HPES), produced in partnership with Pulsenomics, LLC. The HPES polls over 100 experts across the housing and mortgage industry and academia for forecasts of national home price percentage changes in each of the coming five calendar years, as measured by the Fannie Mae Home Price Index (FNM-HPI).

The panel's latest estimates of national home price growth are higher than last quarter's expectations of 3.8% for 2024 but lower than the previous quarter's expectations of 3.4% for 2025. On average, the panel also projects the 30-year fixed mortgage rate to close 2024 at 6.6%, up significantly from the prior quarter's 5.9% forecast. Furthermore, on the recent upward trend in for-sale home listings despite generally rising mortgage rates, 84% of respondents believe that homebuyer and home-seller sensitivity to the "lock-in effect" is diminishing and contributing to the increases in listings. Additionally, a majority would expect any loosening of that effect to result in either "somewhat" or "significant" deceleration in home price growth. Complete results of the Q2 2024 HPES can be found here.

"The rise in mortgage rates in 2024 and continued above-trend home price growth continue to strain home purchase affordability," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Listings have trended generally upward of late, suggesting to us that a rising number of current homeowners can no longer put off moving. However, we believe the ongoing affordability challenges are likely to weigh on how quickly these new listings convert to actual sales. On average, the expert panelists expect only a modest decline in mortgage rates through the rest of the year, and a majority also see the 'lock-in effect' weakening, which would likely lead to a gradual uptick in for-sale listings and continued moderation of home price growth over the forecast horizon."

Terry Loebs, founder of Pulsenomics, added: "A slowdown in home price growth and easing mortgage rates offer a glimmer of hope that the peak of the housing affordability crisis may be behind us. However, the price surge of over 50% nationwide since early 2020 has created a high hurdle that will, unfortunately, keep many aspiring homeowners on a slower path to achieving their dream."

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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group, Pulsenomics, LLC and the surveyed experts included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

About Fannie Mae's Home Price Expectations Survey
Fannie Mae's Home Price Expectations Survey (HPES), produced in partnership with Pulsenomics, LLC, polls over 100 housing experts across the industry and academia for forecasts of national home price percentage changes in each of the coming five calendar years, with the Fannie Mae Home Price Index as the benchmark. On a quarterly basis, Fannie Mae plans to publish the latest panelist-level expectations, as well as a special topic report that includes respondent feedback on topical questions designed to help inform the broader housing industry. The Q2 2024 HPES had 108 respondents and was conducted by Pulsenomics, LLC between May 9, 2024 and May 21, 2024.

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.