Fannie Mae Releases Q3 Home Price Expectations Survey

On Thursday, Fannie Mae released the results of its Q3 Fannie Mae Home Price Expectations Survey (HPSE). Following home price growth of 6.0% in 2023, a panel of housing experts forecasts annual national home price growth of 4.7% in 2024 and 3.1% in 2025.

The HPES polls over 100 experts across the housing and mortgage industry 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). The panel’s latest estimates of national home price growth are higher than last quarter’s expectations of 4.3% for 2024 but lower than the previous quarter’s expectations of 3.2% for 2025.

In background and analysis accompanying the Q3 HPSE, Fannie Mae Vice President and Deputy Chief Economist Mark Palim said:

“Recent measures of home price growth, including our own, have continued to come in stronger than previously expected, as reflected by the 100-plus HPES panelists who, on average, once again modestly upgraded their home price outlook for 2024. Strong home price appreciation has persisted despite purchase affordability remaining stretched for the vast majority of consumers, a dynamic that is still primarily a function of inadequate supply. Our panelists overwhelmingly agreed that there is a fundamental lack of housing in the United States relative to underlying demographic factors—and, on average, believe the nation to be short approximately 2.8 million homes. We’ve previously estimated the shortfall to be more than 4 million. The panelists also shared that they think speeding up construction permitting processes, increasing density around transit corridors, and allowing more “missing middle”-type housing are the local and state policy reforms likeliest to increase housing production. However, most remain apprehensive about the near-term prospects of these sorts of reforms being enacted broadly enough to have a meaningful effect on supply and housing affordability.”

Terry Loebs, founder of Pulsenomics, added:

“Despite robust home value growth in the first half of 2024, our panelists anticipate a slowdown in price appreciation for the remainder of the year and beyond. While lower interest rates could incentivize some homeowners to sell, the deep-rooted housing supply and affordability crises will likely persist, even with a more accommodative monetary policy.”