Projected Home Price Appreciation in the Next Five Years

Projected Home Price Appreciation in the Next Five Years

In the face of compelling data signaling an uptick in home prices across much of the nation, there persists a lingering concern among some about the potential for another price downturn in the immediate future. Recent findings from a Fannie Mae survey indicate that 23% of consumers harbor the belief that prices will decline over the next 12 months, underlining a notable level of apprehension.

To allay these concerns, it becomes imperative to delve into the insights of various experts concerning the trajectory of home prices, not just in the coming year but over the next five years.

Experts Forecast Ongoing Appreciation: The Home Price Expectation Survey (HPES) orchestrated by Pulsenomics amalgamates forecasts from over 100 economists, investment strategists, and housing market analysts. The latest quarterly release from this survey unanimously points to a consensus among experts that home prices will see an annual increase through 2027. (see graph below)


 

While the anticipated rise in 2024 might not be as robust as in 2023, it's pivotal to recognize that home price appreciation is cumulative. If these projections materialize, a 3.32% increase this year would be succeeded by an additional 2.17% increase the following year.

What This Implies for You: For those who remain unconvinced, numerical representations offer a tangible perspective on how the value of a typical home might evolve over the next few years based on HPES projections.


 

Consider this scenario: If you acquired a $400,000 home at the beginning of this year, the forecast suggests a potential accumulation of over $71,000 in household wealth over the next five years.

Bottom Line: Contrary to concerns about a potential decline, a consensus among experts is that home prices will continue to rise nationally, not just in the upcoming year but for the foreseeable future. If you have specific questions or reservations about the trajectory of home prices in your local area, consulting with a real estate agent can provide valuable insights and guidance.