Heres all the data you need for US market slowing but gradual change rather than a crash.
https://realestate.usnews.com/real-estate/housing-market-index/articles/housing-market-predictions-for-the-next-5-years
2024-2028 Housing Market Predictions: A Gradual Thaw With Added ChallengesAs mortgage rates slowly fall, more buyers and sellers will enter the market, but housing prices should stabilize.By Patrick S. Duffy|Edited by Dawn Bradbury|Reviewed by Liisa Rajala|Jan. 23, 2024, at 10:39 a.m.Over the next five years, although some trends accelerated by the COVID-19 pandemic will continue to influence real estate and land use, other factors will also gain in importance. Among those are an aging population, the rising costs of climate change, a more unstable world and the expansion of artificial intelligence into new corners of the economy. As a consequence, even if the housing market gradually unfreezes as mortgage rates slowly decline from 2023's highs, the hottest housing markets in 2028 may look a bit different from early 2024.
This is based on data sourced from several authoritative sources, including the U.S. News Housing Market Index, an interactive platform providing a data-driven overview of the housing market nationwide.
Key Findings:
- After falling to a 28-year low in 2023, existing home sales will gradually rebound as mortgage rates decline.
- With home prices holding onto their gains due to lack of supply, true price discovery will occur as lending rates fall and more homes are listed for sale.
- Sales of newly built homes will hold their elevated market share due to builders' ability to buy down mortgage rates plus pent-up housing demand.
- Rents will stabilize due to added supply and more closely track inflation rates.
Sales Will Remain Low as the Housing Market Slowly Thaws
A year ago, the main challenge in predicting what the next five years would bring for the housing market was a high level of uncertainty. Most economists were predicting a recession because the chances of engineering a “soft landing” to avoid inflation while also avoiding rising unemployment was deemed low. As it turns out, most economists were wrong about the reasons for the inflation, and the U.S. economy has proven to be more resilient than expected. The main questions now are how long it will take to bring inflation back to 2.0% as well as for mortgage rates to fall enough to spur more home sales.
According to the Fed’s most recent economic projections from December, economists don’t see inflation subsiding to 2.0% on a consistent basis until 2026, which could mean higher but declining short-term interest rates for the next two years. However, inflation could still be falling steadily between now and then, meaning lower mortgage rates probably will drop more or less in tandem. But with nearly 90% of homeowners with mortgage rates under 6%, they’ll have to fall well below that level to prompt sellers who can afford to wait.
Home Prices: After falling 0.8% year-over-year through December 2023, home prices tracked by the National Association of Realtors are forecast to rebound by 1.8% to $390,000 by year-end 2024. By 2025 through 2028, given the large run-up from 2021 through 2023, home prices are predicted to rise more gradually at about a percentage point above the rate of inflation, for an estimated increase of 13% to 14% from 2023 levels.
Home Sales: After falling sharply in 2023 to the lowest level since 1995, existing home sales are predicted to jump sharply in 2024 and 2025 as mortgage rates fall and build on those gains through 2028. Sales of new homes, which continued to rise in 2023 due to builders’ ability to buy down mortgage rates to boost affordability, will expand on those gains.
Home Rents: After rising sharply in 2021 and 2022, home rents continued to rise in 2023 at a much slower pace. For 2024, rents are predicted to remain stable and rise slightly for single-family homes. However, given ample new supply of multifamily units, apartment rents are predicted to fall slightly while also offering concessions such as a free month to tenants if they sign a lease. By 2028, rents for single-family homes will rise faster than for multifamily residences, due both to the growing popularity of Build-to-Rent homes as well as the excess supply of apartments taking more time to absorb.
Mortgage Rates: Rates for 30-year fixed mortgage rates are predicted to gradually fall over the forecast period but are unlikely to fall under 5.0% due to rising government debt in the U.S. and around the world crowding out the availability of financing.
