Home prices are likely to increase slightly faster than previously thought in 2024, but slower than a prior projection for next year as
A second quarter survey found a panel averaging 4.3% growth pace for 2024, up from 3.8% in the first quarter survey. Year-to-year for 2025, the panel expects growth of 3.2%, down from 3.4% one quarter ago. Annual appreciation last year was 6.6%, Fannie Mae said.
Most of those surveyed, 84% of the 95 responses, support
The Home Price Expectations survey was conducted with Pulsenomics between May 9 and May 21. That was a period where average mortgage rates dropped
However, 16% of respondents supported the proposition that the recent rise in inventory is a "temporary jump" related to the needs of a certain group of current property owners who could no longer delay moving on from their current home.
Home prices are rising, and although the pace is diminishing, they are still going up, said Doug Duncan, chief economist at Fannie Mae, in an interview with National Mortgage News editors and reporters.
At the same time mortgage rates have stayed in the 7% range.
"Is the 7% mortgage a breaking point?" Duncan asked. "Incomes have not grown enough to catch up to that combined pair of costs."
Part of the reason why
It might have moved approximately 1.5 million buyers forward in time for when they normally might have purchased a home, Duncan continued.
When the survey asked about the impact on price appreciation if evidence arises that the lock-in effect is fading in the coming months, just under half of the responses, 49%, said it would decelerate somewhat. Another 10% thought it would decelerate significantly.
Approximately one-quarter of the 94 responses to the question said home price appreciation would not change much and another 15% went as far to say that this would accelerate somewhat.
On a cumulative basis, the panel expects two-year price growth of 7.67%, three-year growth of 11.4%, four-year growth of 15.92% and five-year growth of 20.78%.
The rate forecast from the panel also was significantly increased, with the 30-year to end 2024 at 6.6%, versus 5.9% in the last survey.
"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," Terry Loebs, founder of Pulsenomics, said in a press release. "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."
Meanwhile, for the four weeks ended June 2, home prices rose 4.4% on a nationwide basis
While the median sales price for this period was $392,200, the median asking price rose 5.9% from one year earlier, to $417,274.
Prices actually fell in four large metropolitan areas — the Texas cities of Austin; down 2.9%; San Antonio, 1.2% lower; and Fort Worth, which also had a 1.2% fall; along with Portland, Oregon, where prices were off by 0.9% compared to the same time last year. That is the most metros with price declines since January.
For those observers looking for increased inventory easing the market, the data in the Redfin report might give them pause.
New listings increased by 6.9%, the smallest amount in the past four months, with the exception of the four-week period ended May 5.
Active listings grew 15.8%, Redfin said, and the median time on market increased by three days to 32.
