Home Prices on the Rise: What Experts Predict for the Next 5 Years

In a housing market that's been making headlines for its dynamic shifts, it's only natural that concerns about future price trends would arise. While many data sources are showing a consistent upward trajectory in home prices across the nation, there are still lingering worries about the possibility of another market crash. In fact, a recent survey conducted by Fannie Mae revealed that 23% of consumers believe home prices will fall over the next 12 months. If you're one of those individuals grappling with this fear, it's essential to seek insights from experts to help alleviate concerns. Here's what leading authorities in the real estate industry project for home prices not just in the coming year but over the next five years.

Experts Project Ongoing Appreciation

One of the most reliable ways to gain confidence in the trajectory of home prices is to examine the collective opinions of experts in the field. The Home Price Expectation Survey (HPES) from Pulsenomics is a valuable resource that compiles projections for home prices over a five-year horizon. It aggregates forecasts from more than 100 economists, investment strategists, and housing market analysts. The most recent quarterly release of the HPES paints a clear picture: home prices are anticipated to rise consistently every year through 2027.

Here's a visualization of these projections:

While the projected increase for 2024 might not be as substantial as that for 2023, it's important to remember that home price appreciation is cumulative. In simpler terms, if these experts' predictions hold true, your home's value could rise by 3.32% this year and an additional 2.17% the following year.

What Does This Mean for You?

If you're still uncertain about the future direction of home prices, let's delve into some numbers that might grab your attention. The figures below illustrate how the value of a typical home could evolve over the next few years, using expert projections from the HPES:

Let's consider an example where you purchased a $400,000 home at the beginning of this year. Factoring in the forecasts from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

For those of you who worry that home prices might take a nosedive, take solace in the fact that a significant number of experts are saying quite the opposite. Nationally, the consensus among these experts is that home prices will not only continue to rise in the next year but will do so for several years to come, at a pace that aligns with a healthy market. Should you have any questions or concerns about what this means for home prices in your local area, please don't hesitate to reach out. We're here to help you navigate the ever-evolving real estate landscape.

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