US Housing Market Forecast: Expert Predictions for 2025–2029
David Garner
🏠 Housing Market Forecast: What Experts Predict for 2025–2029
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If you’ve been waiting for the U.S. housing market to settle into a more predictable pattern, the next few years might just deliver. According to new research from Fannie Mae’s Home Price Expectations Survey (Q1 2025), a panel of over 100 housing experts expects moderate but steady home price growth through 2029.
Gone are the double-digit surges of the COVID-era boom, but also, at least for now, the fears of a market-wide crash. Here’s what to expect, year by year, and what it means for buyers, sellers, and homeowners.
Related: The Top 10 Most and Least Affordable Housing Markets in the US in 2025
📊 The Big Picture: Home Prices Still Rising, Just More Slowly
Between 2025 and 2029, experts anticipate U.S. home prices will increase by a cumulative 19.8%, averaging about 3.7% growth per year.
That’s a significant slowdown from the pandemic-fuelled boom (which averaged 9.5% annually from 2020 to 2024), but it still points to ongoing appreciation.
| Year | Low | Average | High |
|---|---|---|---|
| 2025 | +0.6% | +3.4% | +5.2% |
| 2026 | +1.6% | +6.8% | +11.0% |
| 2027 | +3.2% | +10.8% | +17.8% |
| 2028 | +5.6% | +15.2% | +24.3% |
| 2029 | +8.3% | +19.8% | +31.0% |
While the average trajectory points to growth, the wide gap between the optimistic and pessimistic scenarios is worth noting, highlighting just how uncertain the outlook remains.
Related: Growing Housing Affordability Gap Creating Golden Opportunity for Investors
🔍 What’s Behind the Forecast?
1. Rising But Stabilizing Prices
After a projected 5.8% gain in 2024, home prices are expected to grow 3.4% in 2025 and 3.3% in 2026. That’s slower than in recent years, but it reflects a market shifting into a more sustainable gear.
2. Supply and Demand Pressures
Inventory remains tight, and while rising mortgage rates have cooled buyer enthusiasm, the fundamental demand for homeownership is still strong. Demographics, especially Millennials aging into peak buying years, continue to support upward pressure on prices.
3. Interest Rate Uncertainty
Experts remain split on how long mortgage rates will stay elevated. Rate paths will significantly influence affordability and demand over the next four years. If rates decline faster than expected, we could lean toward the optimistic growth path.
4. Affordability Concerns
While home values are expected to keep rising, wages aren’t necessarily keeping pace. This limits how far prices can go without excluding large swaths of potential buyers, especially first-timers.
Related: US Mortgage and Refinance Rates May 22nd 2025
📈 How Does This Compare to the Past?
Looking at average annual home price growth over several historic periods:
| Period | Avg. Annual Price Growth |
|---|---|
| Pre-Bubble (1975–1999) | 5.1% |
| Housing Bubble (2000–2006) | 7.7% |
| Great Recession (2006–2012) | -4.8% |
| Recovery (2012–2020) | 4.5% |
| COVID Boom (2020–2024) | 9.5% |
| Forecast (2025–2029) | 3.7% |
The 2025–2029 forecast reflects a “cooling” from the past decade’s extremes, somewhere between the post-recession recovery and the long-term historical average.
Related: 10-Year US Interest Rate Forecast from the Experts
🤔 Why the Uncertainty?
One of the more interesting findings in the Fannie Mae report is the continued dispersion in home price expectations. This metric tracks how much disagreement exists among experts. The dispersion spiked during the mortgage rate hikes of 2022–2023 and remains higher than historical norms.
Key sources of uncertainty:
Mortgage Rates: Will they stay high, fall slowly, or drop faster than expected?
Inventory Levels: Will more sellers enter the market—or will the “lock-in” effect continue?
Economic Growth: Will we see a soft landing, a mild recession, or stronger-than-expected momentum?
Affordability Crisis: Will high prices and high borrowing costs finally reach a tipping point?
Related: Dave Ramseys Predictions for US Mortgage Rates in 2025
💡 What Does This Mean For You?
🔑 If You’re a Buyer:
Prices aren’t expected to fall—so waiting for a crash might backfire.
Focus on what you can afford now, and monitor mortgage rates closely.
Look for less competition than in recent years—but still be ready to act.
🔑 If You’re a Seller:
Price growth is expected to continue, but not at 2020-2021 levels.
Market your home strategically and avoid overpricing.
Presentation matters more when buyers have more time and options.
🔑 If You’re a Homeowner:
Expect steady equity gains, which is good for long-term wealth.
Refinancing opportunities could improve if rates trend lower later in the decade.
Stay invested for the long haul—short-term volatility is normal, but the trajectory is positive.
📌 Final Thoughts: What This All Means
The Fannie Mae Home Price Expectations Survey suggests a cooling – but not collapsing – market ahead. Prices are forecast to rise nearly 20% through 2029, with annual gains moderating to around 3.7%. The outlook varies depending on how mortgage rates, economic trends, and housing inventory evolve, but the broader theme is this:
The U.S. housing market is entering a new phase, more stable, less explosive, and shaped by affordability realities.
This return to moderation could be healthy for long-term buyers and homeowners alike. While no one can predict the future perfectly, having a data-driven forecast like this can help you plan smarter, whether you’re buying, selling, or staying put.
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