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 rise, not fall.
So, let’s see exactly how experts’ thinking has shifted – and what’s caused the change.
2024 Home Price Forecasts: Then and Now
The chart below shows what seven expert organizations think will happen to home prices in 2024. It compares their first 2024 home price forecasts (made at the end of 2023) with their newest projections:
The middle column shows that, at first, these experts thought home prices would only go up a little this year. But if you look at the column on the right, you’ll see they’ve all updated their forecasts and now think prices will go up more than they originally thought.
And some of the differences are major.
Two big factors are keeping such strong upward pressure on home prices. The first is how few homes are for sale right now. According to Business Insider:
“Low home inventory is a chronic problem in the US. This has generally kept home prices up . . .”
A lack of housing inventory has been pushing prices up for a long time, and that’s not expected to change dramatically this year. But what has changed a bit is mortgage rates.
Late last year, when most housing market experts called for home prices to rise only slightly in 2024, mortgage rates were up, and buyer demand was more moderate.
Now that rates have come down from their peak last October, and with further declines expected over the year, buyer demand has picked up. That increase in demand, along with an ongoing lack of inventory, has caused the experts to feel the upward pressure on prices will be stronger than they expected a couple of months ago.
A Look Forward To Get Ahead of the Next Forecast Revisions
Real estate experts regularly revise their home price forecasts as the housing market shifts. It’s a normal part of their job to ensure their projections are always up-to-date and factor in the latest changes in the housing market.
That means they’ll continue to revise their projections as the housing market changes, just as they’ve always done. How those forecasts change next is anyone’s guess, but pay attention to mortgage rates.
If they trend down as the year goes on, as expected, that could lead to more buyer demand and even higher home price forecasts.
It’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to increase, too.
Bottom Line
At first, experts believed home prices would only go up a little this year. But now, they’ve changed their minds and forecast prices to grow even more than initially thought. Let’s connect with Chicago’s real estate agents so you know what to expect with prices in our area.
