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  Where do the Experts See Home Prices Heading?

  Dec 14, 2024

  Where do the Experts See Home Prices Heading?

  At year-end, Fannie Mae collects housing forecasts from 100+ industry experts (including MBS Highway’s CEO, Barry Habib). The consensus? Around +4% price growth in 2024 and 2025, and cumulative price growth of 14–40% between 2025 and 2029. A few thoughts on this:

  • 4% annual price growth over 5 years equates to 22% cumulative price growth (it’s a bit higher than just 4% X 5 years because of compounding)

  • 40% cumulative price growth (the high end of the Fannie Mae forecast range) implies average annual price growth of 7%.

  • 14% cumulative price growth (the low end of the Fannie Mae forecast range) implies ~2.7% average annual price growth.

   

  That’s a big range, right? Look, forecasting 5 years out is difficult. And to be honest, beyond a few years, people are just guessing. But here’s what’s important:

  • 4% price growth over the next two years would generate $33,000 in appreciation gains on a $400,000 home. Not bad at all.

  • 27% cumulative price growth (the mean of the Fannie Mae forecast range) over the next 5 years would generate $108,000 in appreciation gains on a $400,000 home. Chunky!

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