{"id":4416,"date":"2023-08-01T16:13:03","date_gmt":"2023-08-01T16:13:03","guid":{"rendered":"https:\/\/frankbuysphilly.com\/how-much-will-home-prices-climb-over-the-next-year\/"},"modified":"2023-08-01T16:13:03","modified_gmt":"2023-08-01T16:13:03","slug":"how-much-will-home-prices-climb-over-the-next-year","status":"publish","type":"post","link":"https:\/\/frankbuysphilly.com\/how-much-will-home-prices-climb-over-the-next-year\/","title":{"rendered":"How much will home prices climb over the next year?"},"content":{"rendered":"
\n<\/p>\n
Today I\u2019m going to focus on home prices around the country. How much will home prices climb over the next year? All year, the strength of home-buyer demand and the tight supply of homes for sale has meant that the market pretty rapidly found a floor on the home price correction of 2022. Even as mortgage rates <\/a>rose, and affordability was pushed out of reach for many potential home buyers, there are still sufficient buyers who can afford these prices and these rates. <\/p>\n The number of buyers has been surprising. If you were looking at the market in the fall of 2022, you would have expected home prices to continue to fall further in 2023. That\u2019s what I was expecting. But, the price correction stopped right after December 2022. In July 2022, we talked about how it looked like home prices would be flat at best over the next year. After the mortgage rate spike in September 2022, we got significantly more bearish on home prices for 2023. That bearishness from late last year has reversed. Demand picked up this year and home prices stabilized.<\/p>\n So now the question is: What do we know for the next year? <\/p>\n Zillow released a report that said they expect 6% home price gains for next year. If you haven\u2019t been paying close attention to the data, that might seem shocking. So today we\u2019ll look at the current price trends and the leading indicators to see if we can make some sense of where that comes from and what we can see already for 2024.<\/p>\n Prices<\/strong><\/p>\n The leading indicators point to home prices at flat to slightly higher for the next 12 months. If mortgage rates decline say into the 5% range by next spring, I\u2019d expect home prices to maybe appreciate 5% in that time. If mortgage rates stay near 7%, it seems hard for home prices to climb that much. If mortgage rates increase to the 7.5% or 8% range, then there is definitely downside risk for home prices. At Altos Research<\/strong> we do not forecast mortgage rates. But the forecasters we respect still seem to agree that rates have probably peaked and will be declining. That implies the higher end of our price forecast is likely.<\/p>\n