Expert Panel Upgrades Home Price Growth Outlook, Cites Supply Constraints and Lower Mortgage Rates

WASHINGTON, DC – A panel of housing experts expects annual national home price growth of 3.8% in 2024 and 3.4% in 2025, according to the Q1 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 2.4% for 2024 and 2.7% for 2025. Additionally, an increased share of panelists indicated higher upside risk to their home price forecasts – 41 percent in Q1 2024 compared to 26 percent in Q4 2023 – with a majority citing ongoing housing supply constraints and lower mortgage rates as the basis for that belief. The panel also projects a median 30-year fixed mortgage rate of 6% by the end of 2024. Complete results of the Q1 2024 survey can be found here.

"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," said Hamilton Fout, Fannie Mae Vice President of Economics. "If mortgage rates move toward the panel-predicted six percent median rate by the end of 2024, we would expect this to be supportive of continued home price growth, particularly given the persistent supply-side challenges facing the housing market."

Terry Loebs, founder of Pulsenomics, added: "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."

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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 Q1 2024 HPES had 114 respondents and was conducted by Pulsenomics, LLC between January 29, 2024 and February 9, 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.