One of the biggest reasons many buyers are still waiting is because they think home prices will come down.
Some are expecting a market crash and hope they’ll get a better deal if they wait.
Others are concerned about buying now and seeing their home’s value drop later on.
And that makes sense. Nobody wants to pay more than they need to or buy a home right before values take a dip. But here’s the question you should be asking:
What if the crash you're waiting for isn't actually coming?
That’s exactly what the latest data is showing.
Experts Are Not Calling for a Crash
If you’ve been scrolling online lately, you’ve probably seen posts claiming that home prices are about to take a major hit. And while it’s true that some markets are seeing slight price declines, those changes have been relatively modest.
But that doesn't mean a nationwide crash.
While prices are leveling off in some areas, Realtor.com data shows home values are still rising in 71% of housing markets across the country.
The problem is that negative news gets more attention, so you’re hearing more about a few markets where prices are falling than about the many where they’re still climbing, and that’s a shame.
That's why many buyers think prices are falling across the board when they actually aren't. So how can you tell where prices are truly headed from here?
That’s where the Fannie Mae Home Price Expectations Survey (HPES) comes into the picture.
Home Prices Will Rise for the Next 5 Years
Each quarter, over 100 economists, housing experts, and market analysts are asked where they think home prices are headed based on the latest available data.
And even with all the uncertainty in today's market, they mostly agreed on one thing:
They don't expect a crash to happen.
In fact, their average forecast predicts home prices will go up every year for at least the next five years (see graph below).
The main point is that most people don’t expect prices to drop. Instead, they’re expecting home prices to keep rising, just at a steadier, more normal pace. And if you’re looking at those forecasts thinking, “well, of course they’d say that,” it’s worth remembering this survey isn’t just full of optimists. It also includes people who are pretty cautious or even pessimistic about the market too.
Even the Pessimists Aren't Predicting a Crash
Researchers split the group into different categories based on how optimistic or pessimistic they are about housing. And even the most cautious group still expects home prices to go up over the next five years.
Some people expect prices to rise about 4% a year, while others think closer to 1% is more likely. The truth will probably fall somewhere in between.
Think about that for a second. Experts aren’t arguing that prices will crash, they’re debating how much they’ll go up.
That’s a very different story from what you usually see on social media.
This Means Waiting Could Actually Cost You
So if you’re waiting to make a move because you think prices will drop, you might end up waiting longer than expected. According to the experts, a widespread crash just isn’t likely.
For example, based on the HPES forecast, someone who bought a $400,000 home this January could build nearly $40,000 in equity over the next five years just from price appreciation alone, even in a more moderate market like this.
Of course, this really depends on local market conditions since this is a national average. But overall, if the experts are right, the bigger risk isn’t that prices will crash. It’s waiting around for a crash that may never actually happen.
Because depending on your local market, waiting could mean missing out on about $40,000 in equity or ending up paying roughly $40,000 more for the same home in five years.
Bottom Line
Many buyers are holding off because they expect prices to drop, but experts don’t agree.
If you’re wondering whether it makes sense to wait, let’s talk. I can walk you through what’s happening in our local market and what it might mean for your plans.
