BAM Key Details:

  • According to the Q1 2024 Fannie Mae Home Price Expectations Survey (HPES), produced in partnership with Pulsenomics, LLC, a panel of 100+ housing experts forecasts home price growth of 3.8% in 2024 and 3.4% in 2025. 
  • The same survey shows mortgage rates reaching a median of 6% for the 30-year fixed by the end of 2024.

Home price growth expectations for 2024–2026 are on the up with last week’s release of the Q1 2024 Fannie Mae Home Price Expectations Survey (HPES)

Part of that has to do with the median 6% mortgage rates expected by the expert panel by the end of this year. Another part relates to an ongoing shortage in for-sale housing supply. 

Produced in partnership with Pulsenomics, LLC, the Fannie Mae Home Price Expectations Survey results are based on responses from 114 experts in the housing and mortgage industry and academia. The survey was conducted between January 29 and February 9, 2024. 

Experts weighed in on national home price percentage changes for this year as well as the next four calendar years, as measured by the Fannie Mae Home Price Index (FNM-HPI).

The latest estimates shared in the press release are higher than last quarter’s home price projections of 2.4% for 2024 and 2.7% for 2025. 


Source: Fannie Mae

On top of that, the share of panelists indicating a higher upside risk to their home price predictions went up from 26% in Q4 2023 to 41% in Q1 2024. 

The panel also forecasts a median 30-year fixed mortgage rate of 6% by the end of this year. 

Panel projections on home prices are up from last quarter’s forecast

The panel’s expectations on home prices rest primarily on their projections for mortgage rates and ongoing supply-side challenges. As mortgage rates drop, more buyers enter the market and compete for available homes, which are still in short supply—driving up home prices. 


Source: Fannie Mae

Also, a larger share of respondents (41%) indicated an upside risk to their home price projections, compared to 2022 (26%). The majority of that 41% cited ongoing supply issues and declining mortgage rates as the primary reasons for their risk assessment. 


Source: Fannie Mae

On average, our panelists continue to expect home price growth to decelerate this year, but their overall outlook was revised upward this quarter, with most now reporting greater upside risk to home prices than downside risk. If mortgage rates move toward the panel-predicted six percent median rate by the end of 2024, we would expect this to be supportive of continued home price growth, particularly given the persistent supply-side challenges facing the housing market.

Hamilton Fout

Fannie Mae Vice President of Economics

Terry Loebs, founder of Pulsenomics, added— 

This is a positive outlook for those who already own a home, but as the dearth of listings boosts both prevailing values and expected future prices, the affordability concerns of prospective homebuyers are unlikely to fade soon.

Terry Loebs

Founder of Pulsenomics

Mortgage rates expected to reach median 6% by end of 2024

As mentioned earlier, part of the reason for the uptick in home price growth expectations is the forecasted decline in mortgage rates. According to the survey, the panel is forecasting a median 30-year fixed mortgage rate of 6% by the end of 2024. 

Byron Lazine touched on this point during his review of the Fannie Mae survey during yesterday’s Hot Sheet, contrasting the panel projection with the tantalizing idea that 2024 could be the year of 5% mortgage rates:

You’ve got 100 experts forecasting that over this year—because we’re sitting over 7% right now—the 30-year fixed is going to come down a full point…We saw how many more pending home sales happened in December, when we were in that lower 6% range, than we had in January… The option of homebuying and home selling opens up to more folks when you go from 7% to 6% on the 30-year. And we have 100…experts that suggest that will happen—that we’re going to see that 1% decline.

Byron Lazine

That said, optimistic projections for 5% rates this year could do more harm than good. We’re clearly not there, yet, and implicitly encouraging buyers to wait for rates to hit that level could cost them the projected 3.8% growth in home value if they’re able to buy a home in 2024—before rates drop below 7% and more buyers enter the market. 

When inside real estate people say there are going to be 5% 30-year fixed rates, they’re really talking about five-point-nines, which is a 6% to me. And then the consumer hears the fives and they’re thinking 5.0%. So, this 5% 30-year fixed talk is misleading to me. I’d stay away from it. I’d be more encouraged if we can get into the low 6s. I think that’s more of a reliable estimate.

Byron Lazine

Byron recommended listening to the Knowledge Brokers Podcast episode with HousingWire Lead Analyst Logan Mohtashami to gain a better understanding of the context needed when it comes to projecting mortgage rates for this year, let alone for years to come. 

Read the full Fannie Mae report on survey results for more, including charts and methodology.