Thinking about buying a home? If so, you’re probably wondering: should I buy now or wait? Nobody can make that decision for you, but here’s some information that can help you decide.

What’s Next for Home Prices?

Each quarter, Fannie Mae and Pulsenomics publish the results of the Home Price Expectations Survey (HPES). It asks more than 100 experts—economists, real estate professionals, and investment and market strategists—what they think will happen with home prices.

In the latest survey, those experts say home prices are going to keep going up for the next five years (see graph below):

Here’s what all the green on this chart should tell you. They’re not expecting any price declines. Instead, they’re saying we’ll see a 3-4% rise each year.

And even though home prices aren’t expected to climb by as much in 2025 as they are 2024, keep in mind these increases can really add up over time. It works like this. If these experts are right and your home’s value goes up by 3.78% this year, it’s set to grow another 3.36% next year. And another 3.87% the year after that.

What Does This Mean for You?

Knowing that prices are forecasted to keep going up should make you feel good about buying a home. That’s because it means your home is an asset that’s projected to grow in value in the years ahead.

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using expert projections from the HPES. Check out the graph below:

In this example, imagine you bought a home for $400,000 at the start of this year. Based on these projections, you could end up gaining over $83,000 in household wealth over the next five years as your home grows in value.

Of course, you could also wait – but if you do, buying a home is just going to end up costing you more. 

Bottom Line

If you’re thinking it’s time to get your own place, and you’re ready and able to do so, buying now might make sense. Your home is expected to keep getting more valuable as prices go up. Teaming up with a local real estate agent is a good first step to start looking for your next home today.

If you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say home prices are going to keep going up.

Today’s market is very different than it was before the housing crash in 2008. Here’s why.

It’s Harder To Get a Loan Now – and That’s Actually a Good Thing

It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.

Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:

The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of foreclosures coming onto the market.

There Are Far Fewer Homes for Sale Today, so Prices Won’t Crash

Because there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.

The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now (shown in blue) compares to the crash (shown in red):

Today, unsold inventory sits at just a 3.0-months’ supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.

People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

Back in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.

But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.

Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high:

That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to explain:

“Only 1.1% of mortgage holders (582K) ended the year underwater, down from 1.5% (807K) at this time last year.”

And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down. 

Bottom Line

While you may be hoping for something that brings prices down, that’s not what the data tells us is going to happen. The most current research clearly shows that today’s market is nothing like it was last time.

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.

There are two big factors 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 now – 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 were calling for home prices to rise only a little bit 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 course of the year, buyer demand has picked up. That increase in demand, along with an ongoing lack of inventory, is what’s caused the experts to feel the upward pressure on prices will be stronger than they expected a couple 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 that ensures 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 they’re expected to do, that could lead to more buyer demand and even higher home price forecasts.

Basically, it’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to go up, 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 will grow even more than they originally thought. Connect with a local real estate agent so you know what to expect with prices in your area.