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Fannie Mae Sees Positive Home Price Growth Through 2025

Experts said the growth is encouraging for homebuyers but other factors, including AI and green energy, will play a role.

WASHINGTON – A panel of national housing experts expect U.S. home prices to continue to grow through 2025, denoting “an encouraging consensus” as the new year ticks closer, a new Fannie Mae survey showed.

Fannie Mae’s Home Price Expectations Home Survey (HPES), conducted by Pulsenomics, found an annual national home price growth of 2.4% in 2024 and 2.7% in 2025. The HPES polls more than 100 experts across the housing and mortgage sectors and academia for forecasts of national home price percentage changes in each of the coming five calendar years, as measured by the Fannie Mae Home Price Index (FNM-HPI).

“Panel-wide, the average expected home price growth rate for 2023 jumped to 5.9%, which is a significant increase from the 3.3% level recorded in the previous survey conducted by Pulsenomics,” Terry Loebs, founder of Pulsenomics, said. “However, a large majority of the surveyed experts do not foresee this momentum carrying over into 2024 – an encouraging consensus for aspiring homebuyers as we approach the new year.”

Freddie Mac SVP and Chief Economist Doug Duncan shared insights into the survey’s findings:

“The survey panelists expect home price growth to decelerate in the coming years, following a 2023 price growth that proved more resilient than many anticipated. Some, including us, had expected the rapid and significant rise in mortgage rates in 2023 to have dampened purchase demand further than it has, putting more downward pressure on home prices this past year than what appears to have occurred. Looking beyond the recent volatility in mortgage rates, panelists expect future rates to decline meaningfully from the recent highs of 8 percent. This would obviously provide improved affordability for potential homebuyers, although anyone expecting the return of the extremely low rate environment from 2020 to 2022 will likely be disappointed. The panelists also revealed that they anticipate other factors will impact long-term interest rates, including demographic trends, expanding fiscal deficits, the evolution of artificial intelligence, and the green energy transition.”

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