Expert Home Price Forecasts for 2024 Revised Up
In recent months, analysts have adjusted their predictions for home prices in 2024, reassessing them in light of the latest data and market indicators. Their increased confidence now suggests a stronger likelihood of price increases rather than declines. Let’s delve into the specifics of how experts’ perspectives have evolved and explore the factors behind this shift.
2024 Home Price Forecasts: Then and Now
The chart below shows what seven expert organizations think will happen to home prices in 2024. It compares their first 2024 home price forecasts (made at the end of 2023) with their newest projections:
The middle column indicates that initially, these experts anticipated modest increases in home prices for the current year. However, upon examining the right column, it becomes apparent that they have all revised their predictions, now anticipating more significant price hikes than initially projected. Notably, some of these adjustments are substantial.
Two significant factors contribute to the robust upward pressure on home prices. The first factor is the current scarcity of homes available for sale. According to Business Insider:
“Low home inventory is a chronic problem in the US. This has generally kept home prices up . . .”
The prolonged shortage of housing inventory has consistently driven prices upward, and this trend is anticipated to persist throughout the current year. However, there has been a slight shift in the dynamics, particularly in mortgage rates.
Towards the end of the previous year, when most housing market analysts were predicting modest increases in home prices for 2024, mortgage rates were elevated, and buyer demand was relatively subdued. Now, with rates having decreased since their peak in October and further declines anticipated in the coming months, buyer demand has surged. This upswing in demand, coupled with the ongoing shortage of inventory, is the driving force behind experts revising their expectations, now foreseeing stronger upward pressure on prices than they did a couple of months ago.
A Look Forward To Get Ahead of the Next Forecast Revisions
Real estate professionals consistently update their predictions for home prices to align with the evolving dynamics of the housing market. This routine practice is an integral aspect of their role, ensuring that their forecasts remain current and consider the most recent developments in the real estate landscape.
This ongoing process indicates that they will persist in adapting their projections in response to shifts in the housing market, as has been their customary approach. The specific changes in these forecasts are uncertain, but it is advisable to closely monitor mortgage rates.
If mortgage rates follow the anticipated downward trend throughout the year, this could potentially result in increased buyer demand and, consequently, even higher forecasts for home prices.
Basically, it’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to go up, too.
Bottom Line
Initially, analysts anticipated only modest growth in home prices for the current year. However, there has been a shift in their perspective, and they have now revised their forecasts, anticipating even more substantial price increases than initially envisioned. Let’s connect, so you can stay informed about what to anticipate regarding prices in our local area.
