Zillow surveyed more than 100 economists, investment strategists, and real estate experts about their predictions for the housing market. Last quarter, respondents believed home prices would fall, but this time around, respondents predict a 3.7% price increase. In addition, a majority of respondents believed that multifamily housing starts would not reach pre-pandemic levels until at least 2023. And for the labor market, 44% of respondents were sure the unemployment rate would reach pre-pandemic levels by the end of the decade.
Just three months ago, when the housing market was in the midst of what turned out to be a brief lull in activity, the panelists expected a slight (0.3%) decline in home prices for 2020. Since then, the prospect of a nationwide price dip has become far less likely as historically low inventory and heavy buyer demand have pushed up prices. Panelists are now more optimistic than they were even before the pandemic, forecasting a 3.7% increase in home prices this year compared to an average expectation for a 2.5% increase in the Q3 2019 survey.
Expectations for home prices in 2021 were also raised, up to 2.7% average forecasted growth from 0.9% last quarter. Beyond next year, the outlook is cloudier. On average, price growth expectations are down slightly from last quarter for 2022 (2.7%, down from 2.9%), 2023 (3%, down from 3.3%) and 2024 (3.3%, down from 3.6%). In dollar terms, panelists expect the typical U.S. home to be worth $255,568 by the end of this year, on average, climbing to a value of $286,851 by the end of 2024.