Future For Home Prices
For the first time in over a decade, we saw a month-over-month decrease in the prices of homes. As the housing market continues to cool due to the Federal Reserve fighting inflation, we will likely see some more price improvements in coming weeks and months. Mortgage rates moving up more almost in direct correlation with home price appreciation. As rates increase, the rate at which home prices increase, decreases. And, in some instance like we saw last month, prices themselves actually decrease. However, based on traditional media sources, it may be hard to see the future for home prices. But, what really is true about the future for home prices?
Opinions differ, models show different data, and experts all have biases. This makes navigating a once-in-a-generation shift in the stable housing market even hard to judge. The most likely outcome that we are seeing a stagnant real estate market. This means some local markets will see price appreciation, while others may see depreciation. While depreciation seems like a scary term, slight depreciation after years of historic appreciation is part of a free market. Here are the latest expert excerpts about the future for home prices.
Future Of Home Price Forecasts
There is a lot of data and different view points in the real estate market right now. The graph we have provided from Keeping Current Matters shows the overall estimates from the 5 leading housing economics teams. Overall, the forecast for home prices is a slight increase, while Zelma is predicting an outsized down-trend in prices. These are the expert’s current projections, for the ones who have updated their projections.
As clearly showed in the graph above, there are 3 expert economics groups that are predicting a more natural increase in home prices. To go alongside with these 3 positive projections, there are 2 projections of decreases. Averaged out, the projections explore a slight increase of .2% in housing prices in the future.
The Takeaways From Experts
Finding a clear consensus about what is in store for the future for home prices is difficult. We have perma-bulls in the real estate market, as well as dooms-day predictors, and everyone in between. Our prediction at Premier Homes Team is that certain local markets will continue to see price increases, while some will start seeing a decline in prices.
Essentially, the expert predictions are mixed, and will likely continue to show a divide in predictions. Home prices will likely decrease in some markets, while staying steady or outsized in both directions in others. Depending on local conditions, needs, and demand for housing, some markets might not see a shift in prices.
Good News Down The Line…
The good news? The future for home prices will likely return to more normal and sustainable levels coming after a question-filled 2023. The latest forecast from Wells Fargo shows that prices might fall in 2023 but will likely head back up in 2024. The forecast calls for a 3% increase in 2024, after a slight fall next year. This is way more in tune with the historical 4% increase that has made real estate the most stable investment in America.
According to the Home Price Expectation Survey (HPES) from Pulsenomics, industry experts call for ongoing appreciation from 2024 to 2026. This goes to show the resiliency of the American housing market. According to Jason Lewris, Co-founder and Chief Data Officer for Parcl,
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
The housing market is shifting from one historic aspect to another. This is the most rapid change in the history and will likely continue to change in historic natures.