Fannie Mae HPES Predicts Home Price Growth Will Moderate

(Image courtesy of Fannie Mae/Pulsenomics; Breakout image courtesy of Philippe WEICKMANN/pexels.com)

Fannie Mae, in partnership with Pulsenomics, Acton, Mass., released its Home Price Expectations Survey for the first quarter.

A panel of more than 100 housing experts forecasts home price growth to average 3.4% in 2025 and 3.3% in 2026. That follows national home price growth of 5.8% last year.

Those are revisions from the fourth-quarter predictions of 3.8% for 2025 and 3.6% for 2026 as measured by the Fannie Mae Home Price Index.

Looking back for historical context of average annual growth rates, 1975-1999 saw 5.1% growth, Q1 2000-Q3 2006 (deemed the Bubble) saw 7.7% growth, Q4 2006-Q1 2012 (deemed the Bust) saw a 4.8% drop, Q2 2012-Q1 2020 (deemed the Post-Bust Recovery) saw growth of 4.5%, and Q2 2020-Q4 2024 (deemed COVID Reshuffling) saw growth of 9.5%.

For 2025-2029, the panelists anticipate average annual 3.7% growth, with the optimists–or the mean of expectations among the most optimistic quartile of panelists–predicting 5.5%. The pessimists–or the mean of expectations among the most pessimistic quartile of panelists–predict 1.6%.

The Mortgage Bankers Association’s Chief Economist Mike Fratantoni, Deputy Chief Economist Joel Kan and Edward Seiler, MBA Associate Vice President for Housing Economics and Executive Director of the Research Institute for Housing America, contribute to the predictions panel.

“Forecasting is always challenging. In the last five years, that has been even more so given the extreme movements in markets and the economy during and after the pandemic,” Fratantoni said.

The MBA economists were recognized for their accuracy in predictions, winning a 2024 Crystal Ball Award for their 2-year predictions formulated in 2021.

“Given that, I am particularly proud that our forecast team received this award, recognizing MBA as the top forecaster of home price appreciation,” Fratantoni continued. “Edward, Joel, and I now literally have crystal balls on our desk.”