U.S.

home-price
growth
is
predicted
to
finish
this
year
at
4.7%
before
slowing
to
3.1%
in
2025,
according
to
a
quarterly
survey
of
housing
experts
conducted
by
government-sponsored
enterprise
(GSE)


Fannie
Mae.

The
third-quarter
2024
survey
polled
more
than
100
mortgage,
real
estate
and
academic
experts
to
determine

its
predictions
in
partnership
with
data
analytics
firm

Pulsenomics
LLC.
The
poll
aims
to
determine
“forecasts
of
national
home
price
percentage
changes
in
each
of
the
coming
five
calendar
years,
as
measured
by
the
Fannie
Mae
Home
Price
Index.”

For
this
quarterly
edition
of
the
survey,
the
Fannie
Mae
Economic
&
Strategic
Research
(ESR)
Group
also
surveyed
panelists
on
potential
zoning
reforms
being
debated
at
the
state
and

local
levels,
which
are
designed
to
increase
the
production
of
homes
and
rental
units.

The
group
predicted
that
while
these
policy
revisions
are
likely
to
have
an
impact
on

housing
supply
over
the
next
five
years,
the
level
of
impact
is
likely
to
be
either
“moderate”
or
“insignificant.”

“A
plurality
of
panelists
suggested
that
hastening
the
construction
permitting
process
would
have
the
greatest
positive
impact
on
housing
supply
if
broadly
enacted,
[followed]
by
expanding
zoning
for
multifamily
housing
developments
and
enabling
more
‘missing
middle’
or
‘light
touch
density’
housing
construction,”
the
survey
results
stated.

“However,
63%
of
panelists
are
‘not
confident
at
all’
that
the
initiatives
they
think
would
be
most
effective
will
be
enacted
widely
within
the
next
five
years.”

Fannie
Mae
vice
president
and
deputy
chief
economist
Mark
Palim
said
that
home-price
growth
expectations
—
both
externally
and
internally
at
Fannie
Mae
—
have
come
in
stronger
than
anticipated
despite
strained

affordability,
which
primarily
stems
from
limited
housing
supply.

“Our
panelists
overwhelmingly
agreed
that
there
is
a
fundamental
lack
of
housing
in
the
United
States
relative
to
underlying
demographic
factors
—
and,
on
average,
believe
the
nation
to
be
short
approximately
2.8
million
homes,”
he
said.
“We’ve
previously
estimated
the
shortfall
to
be
more
than
4
million.”

Accelerating
the

construction
permitting
process,
along
with
increasing
density
around
transit
corridors
and
facilitating
the
creation
of
so-called
“missing
middle”
homes,
are
policies
that
are
most
likely
to
spur
builder
activity
based
on
panelists’
perspectives,
Palim
added.

“However,
most
remain
apprehensive
about
the
near-term
prospects
of
these
sorts
of
reforms
being
enacted
broadly
enough
to
have
a
meaningful
effect
on
supply
and
housing
affordability,”
Palim
said.

Terry
Loebs,
founder
of
Pulsenomics,
added
that
the
forecasts
indicate
potential
cracks
in
the
resiliency
of
home-price
appreciation.

“While

lower
interest
rates
could
incentivize
some
homeowners
to
sell,
the
deep-rooted
housing
supply
and
affordability
crises
will
likely
persist,
even
with
a
more
accommodative
monetary
policy,”
Loebs
added.

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