New listings are up again this first full week after the Labor Day holiday. But what is perhaps more significant is price reductions are the highest they have been since last fall. This sets the stage for what I have long thought is the best time of the year for buyers… inventory supply hasn’t yet fallen to its lowest point of the year so there are still choices for buyers… but prices are starting to fall toward the typical lowest point of the year in December and January.
Buyers are still looking. Showing traffic is about the same as last year at this time… and new, pending and coming soon listings are also similar to last year.
Last week we looked at where experts are predicting prices are going for the rest of this year. This week experts weigh in on their price predictions for the next five years in the post below from our blog at Keeping Matters Current.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
What Experts Project for Home Prices Over the Next 5 Years
If you’re planning to buy a home, one thing to consider is what experts project home prices will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.
Experts Project Ongoing Appreciation
Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly Home Price Expectation Survey (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):
If you’re someone who was worried home prices would fall because of stories you’ve read online, here’s the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.
And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32% this year, it’ll appreciate by another 2.17% next year. This is a good example of why owning a home is a choice that wins big over time.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. To see how a typical home’s value could change in the next few years using the expert projections from the HPES, check out the graph below:
In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.
So, if you’re thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run.
Bottom Line
According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Let’s connect to start the homebuying process today.
