Despite higher borrowing costs, U.S. home prices are expected to fall less than previously estimated for this year before plateauing in 2024, according to a poll of property analysts conducted by Reuters. Although the Federal Reserve has been implementing its tightest tightening cycle in 40 years, home prices have only decreased slightly, by just over 5% from their previous heights, compared to a rise of 45% during the COVID-19 pandemic. This resilience is attributed to the persistently tight housing supply, which is predicted to remain that way for at least another six months. Consequently, the analysts expect a 2.8% decline in average home prices this year, which is less than the 4.5% drop that was predicted two months earlier.
One major consulting firm mentioned in this article is Capital Economics. Sam Hall, a property economist at the firm, said that they anticipate prices to decrease further in the future.
Another person mentioned in this article is Sal Guatieri, the senior economist at BMO Capital Markets, who said that despite the doubling of mortgage rates since 2021, property owners have not been compelled to sell as they have jobs and are happy with their prolonged mortgage deals.
