Expert Panel Sees Home Prices Rising 2.4% in 2024 and 2.7% in 2025, New Fannie Mae Survey Shows

WASHINGTON, DC – A panel of housing experts expects annual national home price growth of 2.4% in 2024 and 2.7% in 2025, according to the Q4 2023 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). On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively. Complete results of the Q4 2023 survey can be found here.

With mortgage rates having experienced significant volatility of late, this quarter's HPES also asked panelists about their long-run interest rate expectations, as well as their opinions on potential drivers of mortgage rates in the future. The average respondent expects the 30-year fixed rate mortgage rate to eventually settle to an average of approximately 5.7%.

"The survey panelists expect home price growth to decelerate in the coming years, following 2023 price growth that proved more resilient than many anticipated," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Some, including us, had expected the rapid and significant rise in mortgage rates in 2023 to have dampened purchase demand further than it has, putting more downward pressure on home prices this past year than what appears to have occurred. Looking beyond the recent volatility in mortgage rates, panelists expect future rates to decline meaningfully from the recent highs of 8 percent. This would obviously provide improved affordability for potential homebuyers, although anyone expecting the return of the extremely low rate environment from 2020 to 2022 will likely be disappointed. The panelists also revealed that they anticipate other factors will impact long-term interest rates, including demographic trends, expanding fiscal deficits, the evolution of artificial intelligence, and the green energy transition."

"Panel-wide, the average expected home price growth rate for 2023 jumped to 5.9%, which is a significant increase from the 3.3% level recorded in the previous survey conducted by Pulsenomics," said Terry Loebs, founder of Pulsenomics. "However, a large majority of the surveyed experts do not foresee this momentum carrying over into 2024—an encouraging consensus for aspiring homebuyers as we approach the new year."

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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 Q4 2023 HPES had 109 respondents and was conducted by Pulsenomics, LLC between October 23, 2023 and November 6, 2023.

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.