Expert Panel Upwardly Revises Home Price Growth Outlook, Still Expects Deceleration in 2025 and 2026

WASHINGTON, DC – Following an average expectation for national home price growth of 5.2 percent in 2024, a panel of over 100 housing experts forecasts home price growth to decelerate to 3.8 percent in 2025 and 3.6 percent in 2026, according to the Q4 2024 Fannie Mae (FNMA/OTCQB) Home Price Expectations Survey (HPES), produced in partnership with Pulsenomics, LLC. The panel's latest estimates of national home price growth represent an upward revision from last quarter's expectations of 4.7 percent for 2024, 3.1 percent for 2025, and 3.3 percent for 2026, as measured by the Fannie Mae Home Price Index (FNM-HPI).

The Economic & Strategic Research (ESR) Group also surveyed panelists on their general housing outlook for 2025. On average, the panelists expect existing home sales to remain sluggish for another year, new home sales to trend slightly upward, and mortgage rates to remain elevated but modestly decline over the course of the year to 6.3 percent. Additionally, depending on their expectations for accelerating or decelerating home prices in 2025, the ESR Group also asked for the major factors driving their home price forecast. The largest group, which represents roughly 80 percent of respondents, expects home price growth to decelerate, citing continued high mortgage rates, rising for-sale housing inventory, and slower wage growth as the main drivers. The minority of panelists who expect faster home price appreciation most commonly cited strong pent-up demand from first-time homebuyers, continued tightening of inventory of homes for sale, and easing mortgage rates. Complete results of the Q4 2024 HPES can be found here.

"While home price growth is expected to ease next year, HPES panelists' big-picture view for 2025 appears to be little changed compared to 2024, with most seeing another year of elevated mortgage rates and weak home sales," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "We share our panelists' view that home price growth is likely to decelerate next year, as the mix of continued elevated mortgage rates and the run-up in home prices of the past four years will likely continue to strain affordability and remain an impediment to many would-be homebuyers."

Terry Loebs, founder of Pulsenomics, added: "Although a significant majority of experts expect the nationwide home value appreciation rate will diminish from recent levels, the panelists' annual average projected price increase through 2029 is still well above expectations for economy-wide inflation, suggesting that they expect affordability problems to persist well beyond 2025."

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Opinions, analyses, estimates, forecasts, beliefs, 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, beliefs, 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, beliefs 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 housing and mortgage 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 Q4 2024 HPES had 115 respondents and was conducted by Pulsenomics, LLC, between November 12, 2024, and November 22, 2024.

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, 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.