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Unlock the Future: Home Price Growth Forecasts for 2024 and What They Mean for Homebuyers

Home prices usually appreciate over time, but what are the experts saying about home value growth going into 2024?

December 21, 2023
December 21, 2023
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What will home prices do in 2024? It’s a big question in the mortgage industry every year, and especially so at a time when affordability in the housing market is a hotter topic than ever. “The price of real estate only ever does one thing: goes up,” is a familiar, oft-repeated refrain, and it is based in some truth. Increases in value over time are the general trend. But that truth may get tested in 2024 as several industry analysts are predicting a decline in home prices in 2024.

Will home price appreciation at least slow next year, giving homebuyers a little relief as they’re home shopping? Even if home values decline, will rates come down along with home prices enough for homebuyers to come out of the shells they’ve been in for most of 2023? Only time will tell, but in the meantime, the prognosticators are prognosticating.

The latest forecasts from nine housing authorities range from -1.7% to 4.1% growth in home prices over 2024, with an average rate of 1.34% of positive growth among them.

What Would 1.3% Price Growth Mean for Homebuyers?

Historically, home prices have appreciated approximately 4-5% per year, slightly outpacing the rate of inflation. In its simplest terms, this is what makes real estate in the U.S. a consistently good investment. Growth of 1.3% is considered "flat" in industry terminology, because it is less growth than simple inflation. Look at it this way. If prices on consumer goods go up 3% over the year and you get a 3% raise at the end of the year as a cost of living adjustment, then you buy a home in January that is priced 1.3% higher than is was a year ago, your monthly mortgage payment actually eats up less of your paycheck as a percentage than buying it the year prior would have.

Clearly, 2023 was not the typical year, though. The inflation rate in the U.S. at the end of October had come down to 3.24% while home prices had increased 4.7% year-over-year at the same point.

The median home price in the U.S. at the end of 2023 Q3 was $431,000, according to the Federal Reserve Bank of St. Louis. So a 1.34% increase would potentially add a modest $5,775 to the median sales price of a home in 2024. This is much slower growth than we’ve seen in recent years, perhaps due in part to a lack of affordability in the marketplace primarily driven by rate, not necessarily home prices.

While increasing home values are seen as a good general economic indicator, volatility like the market has seen in the last year-plus can scare potential buyers and sellers away from buying and/or selling a home. It should also be noted that these national statistics merely provide a baseline of information. Many of these same industry analysts are predicting home price increases in some markets, while home prices in other areas of the country are expected to soften.

2024 Home Price Forecasts

Below are the various 2024 home price forecasts by CoreLogic, Redfin, the Mortgage Bankers Association (MBA), Fannie Mae, Freddie Mac, Goldman Sachs, the National Association of REALTORS®, Zillow and

As you can see, Zillow, and Redfin are the most bearish in their predictions for the year ahead, while the MBA, Fannie Mae, Freddie Mac and CoreLogic are the most bullish on home price gains in 2024. Hundreds of different points of economic data go into these predictions, so it’s tough for laypeople to keep up with why one housing authority might predict 4% growth while another predicts a slight decline.

Here are some things to keep in mind, though. There is a certain amount of pent-up demand since mid-2022, when the Federal Reserve began its cycle of 11 rate hikes, which played a large part in driving up mortgage rates to the point they are now. Economists are optimistic that the Fed is finished with its 20-month-long rate-hike campaign, and more recently, the Federal Reserve has hinted that several rate cuts for 2024 and 2025 may be in store, which would push mortgage rates downward. One housing authority’s perception of this pent-up demand may differ from another’s, leading one to be more bullish on future home price growth than the other.

Another factor that makes the current conversation around home prices an important one is the continued movement of the millennial generation into prime home-buying and family-formation years. It’s the largest generation we've seen so far, and they will need a place to live. There are reportedly more than 70 million millennials in the U.S. That all increases demand, which is another potential upward tug on home prices.

Here's something else to keep in mind. If you're shopping for a home, the prospect of any increase in price may seem like a bad thing — a higher bar you'll have to clear in order to achieve your dreams of homeownership. But the overall trend of increasing home prices does not necessarily mean that homes where you are shopping or the home you're looking at will sell for thousands of dollars more next year than it would have this year. Each geographic market behaves independently according to how many people are moving in, how many are moving out and dozens of other factors. Just because home prices generally increase over time does not mean that you will see evidence of it on your individual home search. It's averaged nationally.

And once you own your home, the idea of home price appreciation takes on a whole new meaning. Price appreciation now means value appreciation when you're a homeowner, which means that every month you make your monthly mortgage payment, you have a little bit more equity in the home's value than you did the previous month, and there are many financial benefits to growing your equity stake in your home. It's the reason why homeownership has long been considered the preferred path to wealth creation for millions of people across the country.

Key Takeaways from Each Forecast

  • MBA | + 4.1% | — This is the most aggressive forecast of the bunch. If inventory levels of homes for sale on the market, either through new housing starts or through more sellers getting into the market, don’t improve much next year, this could prove out.
  • CoreLogic | + 2.9% | — It should be noted that CoreLogic’s forecast is the only one in the group that predicts an October-to-October year-over-year increase for its figure instead of comparing the end of 2023 to the end of 2024, like the rest of the forecasts. “Home price growth maintained its upward momentum in October, which continues to reflect gains from the strong spring season and contrasts with last year’s home price declines,” said Dr. Selma Hepp, CoreLogic’s Chief Economist. “But even with higher mortgage rates, October’s price gains line up with historical trends and speak to the strength of some potential buyers’ purchasing power, as they continue to outnumber available homes for sale. Metros that are seeing relatively stronger price gains are those with higher job growth, as well as those with an influx of higher-income, in-migrating households.”
  • Fannie Mae | + 2.8% | — “House prices have proven to be more resilient than expected in light of higher mortgage rates and affordability challenges. Going forward, we still anticipate house price deceleration and predict 2024 house price growth will slow to 2.8 percent [from current 6.7 percent growth levels].”
  • Freddie Mac | + 2.6% | — “Elevated mortgage rates and a slowing economy will present a challenge to the housing market. Home sales will remain near current levels and inventory will not increase substantially as the mortgage rate lock-in effect keeps existing homeowners locked into their current residence. Favorable demographics will keep the share of first-time homebuyers elevated and with limited inventory, upward pressure on house prices will remain. In this scenario, house prices will rise nationally, increasing 5.4% in 2023 and 2.6% in 2024.”
  • Goldman Sachs | + 1.9% | — “Home prices have increased despite the rise in borrowing costs. Prices grew in August by .9% month-over-month, reflecting an annualized 11% pace. Goldman Sachs Research expects home prices, adjusted seasonally and accounting for the full year, to appreciate 2% in 2023, 1.9% in 2024 and 2.8% in 2025. Home prices have been buoyant amid tight supply. When it comes to existing homes, the inventory available for sale is historically low. New listings are being added at the slowest pace on record.”
  • NAR | + .7% | — “Despite the slight gain [in contract signings in September 2023], pending contracts remain at historically low levels due to the highest mortgage rates in 20 years,” said Lawrence Yun, NAR Chief Economist. “Furthermore, inventory remains tight, which hinders sales but keeps home prices elevated.”
  • Zillow | - .2% | — “Predicting how mortgage rates will move is a nearly impossible task, but recent inflation news gives the impression that rates are likely to hold fairly steady as well in the coming months. Taken together, the cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do.”
  • Redfin | - 1% | — “Prices will fall 1% year over year in the second and third quarters, when the home-selling season is in full swing. That will mark the first time prices have declined since 2012, when the housing market was recovering from the Great Recession, with the exception of a brief period in the first half of 2023. That’s a favorable shift for buyers: Prices are ending 2023 up around 3% year over year, and the typical homebuyer’s monthly payment is only about $150 shy of its all-time high. Home prices will still be out of reach for many Americans, but any break in the affordability crisis is a welcome development, nonetheless.”
  • | - 1.7% | — Their analysts characterize this forecast as a “partly sunny” prognosis for homebuyers. “Since May 2022, purchasing the typical for-sale home listing at the prevailing rate for a 30-year fixed-rate mortgage with a 20% down payment meant forking over a quarter or more of the typical household paycheck. In fact, in October 2023, it required 39% of the typical household income and this share is expected to average 36.7% for the full calendar year in 2023. This figure has typically ranged around 21%, so it is well above historical average. We expect that the return to pricing in line with financing costs will begin in 2024, and home prices, mortgage rates, and income growth will each contribute to the improvement. Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year.”


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