Contrary to what most people expected when the Fed started rapidly increasing interest rates, a surge in house prices is captivating homeowners, investors, and analysts alike. Zillow anticipates a 6.5% increase in home values from July 2023 to July 2024, even in the face of ongoing affordability challenges.
Similarly, Freddie Mac predicts a 0.8% increase in prices from August 2023 to August 2024, with an additional 0.9% gain in the subsequent 12 months. According to Freddie Mac, part of the rebound in prices is based on a “large cohort of Millennial first-time homebuyers reaching prime home-buying age.”