{"id":158639,"date":"2023-09-22T14:22:49","date_gmt":"2023-09-22T20:22:49","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=158639"},"modified":"2024-01-08T07:16:29","modified_gmt":"2024-01-08T14:16:29","slug":"zillow-predicts-5-percent-increase-in-home-prices-by-august-2024","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024","title":{"rendered":"Zillow Predicts a 4.9% Rise in Home Prices by Next August\u2014Is That Possible?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you thought real estate prices were high enough, buckle up because some analysts think prices will keep rising. Real estate tech marketplace Zillow predicts home prices will keep going up through next year, largely due to the increase in homes for sale.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/home-value-forecast-august-2023-33074\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">recent report<\/span><\/a><span data-preserver-spaces=\"true\">, Zillow researchers said they think prices will rise 4.9% from August 2023 through August 2024. While that\u2019s good news for current owners, buyers are already feeling the pinch. If prices keep going up, will they be able to keep up?&nbsp;<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_650df77c32d3b: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_650df77c32d3b\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What the Data Says&nbsp;<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Although Zillow lowered its initial predictions from August, when it said prices would jump 6.5% from July 2023 to July 2024, the real estate marketplace is still optimistic about the market. While Zillow revised its projections downward to 4.9% as it anticipates higher mortgage rates and a decrease in market tightness, an uptick in for-sale listings has it confident that prices will continue to rise into next year.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">New listings in August rose 4% from July\u2019s numbers, the first time in Zillow\u2019s history that listings increased over the normally slow late-summer months. While the total new-listing and for-sale inventory total is below the levels seen before the pandemic, the supply uptick helped Zillow\u2019s outlook for home values to cool.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">As such, Zillow does expect 4.1 million existing home sales in 2023, an 18% decline compared to 2022.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Will Buyers Be Able to Keep Up?<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The lack of inventory in the real estate market has been a problem for a while and is one reason why&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/home-prices-reached-record-highs-again-these-markets-are-growing-the-most\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">property values keep rising<\/span><\/a><span data-preserver-spaces=\"true\">. While more Americans are getting priced out of the market, demand for real estate is still up.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If Zillow\u2019s predictions come true and prices continue to increase, will homebuyers reach a breaking point?<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Data suggests that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/25-percent-of-earners-can-afford-housing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">home affordability<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is already at or near an all-time low. The median American family needs to spend 43% of their income in order to afford the median price of a home in the U.S., according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/twitter.com\/charliebilello\/status\/1693608898438279410\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Charlie Bilello<\/span><\/a><span data-preserver-spaces=\"true\">, chief market strategist at Creative Planning.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">And while the median sales price in the second quarter was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/MSPUS\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$416,100<\/span><\/a><span data-preserver-spaces=\"true\">, the median household income of repeat buyers was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/research-and-statistics\/quick-real-estate-statistics\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$96,000, or $71,000<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for first-time homebuyers. Meanwhile, the National Association of Realtors\u2019&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cdn.nar.realtor\/sites\/default\/files\/documents\/hai-07-2023-housing-affordability-index-2023-09-08.pdf?_gl=1*wirk9d*_gcl_au*OTgwNDMwNzkwLjE2OTI5NzczNjg.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Housing Affordability Index<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has steadily fallen over the last year to 87.8 in July, compared to the average of 103.8 in 2022 and 169.9 in 2020. For reference, a value of 100 means that a family making the median income can qualify for a mortgage on a median-priced home.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">In other words, fewer first-time homebuyers can afford homes. According to data from the<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cdn.nar.realtor\/sites\/default\/files\/documents\/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf?_gl=1*v8ltkz*_gcl_au*OTgwNDMwNzkwLjE2OTI5NzczNjg.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">&nbsp;National Association of Realtors<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;(NAR), only 26% of buyers were first-time buyers in 2022, compared to 34% in 2021.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Younger buyers are also finding it harder to afford&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/down-payment\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">down payments<\/span><\/a><span data-preserver-spaces=\"true\">. Indeed, 19% of younger millennials received down payment help from friends or relatives\u2014more than any other generation did\u2014while older millennials and Gen X buyers have had to delay buying homes due to debt.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Meanwhile, separate data from the NAR suggests that homebuyers are putting very little toward a down payment. Among buyers who financed a home, the median percent financed was 86%.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><strong><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Of course, not everyone agrees with Zillow\u2019s predictions. Morgan Stanley thinks home prices will&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.newsweek.com\/house-prices-morgan-stanley-2024-prediction-1818224\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">drop by 2%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in 2024, while&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fortune.com\/2023\/04\/09\/housing-market-analysts-divided-zillow-moodys-issue-home-price-forecasts-2023-2024\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Moody\u2019s<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;thinks high mortgage rates could put pressure on the market for years to come.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">It\u2019s possible that Zillow\u2019s predictions are wrong, and prices will either drop lower or stagnate. The biggest unknown factor in all of this is what the Federal Reserve will do.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The Fed\u2019s interest rate policy has been one of the biggest factors on housing inventory, as the central bank\u2019s interest rate hikes have increased borrowing costs. If the Fed eases or even reverses its rate hikes, mortgage rates will likely fall, easing pressure on buyers and encouraging more owners to sell. But with inflation still far from its 2% mandate,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/federal-reserve-set-to-double-growth-forecast-with-possible-rate-hikes-still-looming\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the Fed is hesitating<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to pump the brakes on its rate hikes.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">With buyers already stretching their resources thin, it remains to be seen if current market conditions will hold or if real estate prices will reach a breaking point in the coming months. For many real estate investors, this means potentially playing out the waiting game for prices to drop. Of course, for those looking to sell, prices are already high, and if Zillow&#8217;s predictions are accurate, they could get even higher. Either way, many investors are on the fence right now, and it seems like it will stay that way for the foreseeable future.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_5cb1472bf37956016cee3ffac6c096c0\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_ea391326c9ba1733b15c1bfdad0ea5aa\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_f61eca843149ca361dacc05758f8ccd0 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/zillow-predicts-5-percent-increase-in-home-prices-by-august-2024&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Zillow is really bullish on housing, but are they right? How much are they projecting prices to grow? And who&#8217;s in disagreement?<\/p>\n","protected":false},"author":613681,"featured_media":158641,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7381],"tags":[],"class_list":["post-158639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-prices"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/158639","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613681"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=158639"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/158639\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/158641"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=158639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=158639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=158639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}