What’s Ahead for Home Prices?

What’s Ahead for Home Prices?
As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation is cooling as well. And if you’re following along with headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?
 
While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.
 
What the Experts Are Saying About Home Prices Next Year
 
The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:
 
What’s Ahead for Home Prices? | MyKCM
 
As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.
 
While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.
 
What Does This Mean?
 
Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.
 
The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest forecast from Wells Fargo shows that, while they feel prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation.
 
And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.
 
As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, says:
 
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
 
Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to a local real estate professional for the guidance you need each step of the way.
 

Bottom Line

 
The housing market is shifting, and it’s a confusing place right now. Let’s connect so you have a trusted real estate professional to help you make confident and informed decisions about what’s happening in our market.

Recent Blog Posts

Stay up to date on the latest real estate trends.

Expert Home Price Forecasts for 2024 Revised Up

Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will… Read more

San Francisco Market Update - February 2024

The median single-family home and condo prices rose meaningfully from December 2023 to January 2024, up 12.9% and 7.3%, respectively. Year-over-year prices also apprec… Read more

East Bay Market Update - February 2024

Mortgage rates were remarkably stable in January, and near-term Fed rate cuts look less likely.

Houses Are Still Selling Fast

Homes are selling faster than the norm for this time of year – and your house may sell quickly too. That’s because more people are looking to buy now that mortgage rat… Read more

Bridging the Gaps on the Road to Homeownership

Homeownership is a major part of the American Dream. But, the path to achieving this dream can be quite difficult. While progress has been made to improve fair housing… Read more

Are More Homeowners Selling as Mortgage Rates Come Down?

Over the past year, one factor that’s really limited the options for your move is how few homes were on the market. That’s because many homeowners chose to delay their… Read more

Climate Change and Your Home

Homeowners are increasingly concerned about how climate change will impact their homes. As the planet continues to warm, we see more frequent and severe weather events… Read more

San Francisco Market Update - January 2024

The median single-family home price rose from November to December, up 7.1%, while condo prices declined 7.1%, coincidentally. Year over year, prices appreciated, up 3… Read more

East Bay Market Update - January 2024

Median single-family home prices declined from November to December, which is normal this time of year. However, single-family home prices appreciated year over year, … Read more

Let’s Talk

You’ve got questions and we can’t wait to answer them.