The housing market has cooled a bit from its pandemic-era boom, when buyers were on the move and locking in historically low mortgage rates. But while things aren't as frenzied as they were in 2021, that doesn't mean buyers should expect falling home prices. In fact, quite the opposite. According to new numbers from Fannie Mae, prices continue to rise and saw a 1.7 percent increase during the first quarter of 2024 – which is about the same rate of increase seen during the final three months of 2023. Doug Duncan, Fannie Mae's senior vice president and chief economist, says the low supply of homes is the issue. “Home prices continued to rise in the first quarter as the housing market remained seriously supply constrained,” Duncan said. “Mortgage rates have trended upward again of late, but there is support for home prices in strong demographic demand from younger generations.” In other words, buyers are beginning to adjust to higher mortgage rates and are returning to a market low on available options. That means demand should continue to outpace supply, which will continue to put upward pressure on prices.
