Housing Market Predictions for Next Year: Prices to Rise by 4.4%
Fannie Mae’s Home Price Expectations Survey (HPES) offers insights into projected U.S. home price changes from 2024 to 2028, as reported by Norada Real estate Investments.
The survey outlines three scenarios — an optimistic outlook with prices rising 32.9%m a moderate consensus of 20.8%, and a pessimistic forecast of 8.7%. Key factors shaping these predictions include economic growth, interest rate trends, and housing supply.
The most optimistic scenario envisions strong economic conditions with low unemployment and stable demand.
According to Norada, one key factor driving the rise in home prices as forecasted by Goldman Sachs is the anticipated interest rate cuts by the Federal Reserve. As the labor market shows signs of loosening, economists predict that the Fed will implement multiple rate reductions in the near future. Lower rates mean lower costs for borrowing, which in turn makes homes more affordable for buyers even as prices continue to climb.
Interestingly, the phrase “bad news is likely good news” reflects the current sentiment in the market. Analysts suggest that concerns about economic downturns can lead to interest cuts that ultimately benefit homebuyers. As employment concerns continue to circulate, it appears that home prices are resilient, with low permanent layoff rates supporting a stable job market.
