Despite the Federal Reserve’s ongoing efforts to tame inflation in the U.S. housing market, home prices could surge over 6% during the next year, according to Zillow’s Home Value Index. If that prediction is correct, the median U.S. home price will rise to $370,754 by July 2024, up from the current median price of $348,125, Insider reports.
While other firms such as Realtor.com and Redfin are reporting home price declines of 0.6% and 4%, respectively, by year-end, Zillow expects low inventory to buoy home prices throughout the remainder of the year and into the first half of 2024.
"Limited for-sale inventory continues to push home prices upward even as mortgage rates remain elevated," Zillow researchers said in a recent note. "The tight inventory conditions and the persistence of elevated mortgage rates are also expected to continue to limit sales volume in the months to come."
Housing affordability has been strained over the past year thanks to high mortgage rates, which have stuck close to a 20-year record. Though high rates typically weigh on demand, they have also discouraged existing homeowners from listing their properties for sale, as many are looking to cling to the low rates at which they financed their home years ago.