“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 Fannie Mae senior vice president and chief economist Mark Palim.
About 80% of the respondents expected to see a deceleration in home price growth because of persisting high mortgage rates, rising for-sale housing inventory, and slower wage growth.
“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,” said Palim.
Meanwhile, the remaining respondents who believe that there will be faster home price appreciation said that it will be because of strong pent-up demand from first-time buyers, continued tightening of inventory of homes for sale, and easing mortgage rates.
“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,” said Pulsenomics founder Terry Loebs.
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