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Real Estate: Housing Prices Are Up 6.6% Since January — Will Trend Continue in 2024?

asbe / Getty Images
asbe / Getty Images

Homebuyers are still facing pressure and a difficult road to homeownership. Despite soaring mortgage rates, prices continue to trend upward in September — a trend that some experts say might continue well into 2024.

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Indeed, home prices were 3.9% higher in September compared with the same month a year earlier, up from a 2.5% change in the previous month, according to the S&P CoreLogic Case-Shiller Index. Prices, per the index, were also 6.6% above January levels — the figures represented a 6.1% year-to-date increase.

Meanwhile, this comes against the backdrop of record high mortgage rates, which have been hovering around 8% in the past few weeks.

While the 30-year fixed mortgage started decreasing slightly — standing at 7.32% on Nov. 27, according to Mortgage News Daily — the figures are double what they were two years ago.

To put this in context, the 30-year fixed mortgage stood at 6.65% for the corresponding week last year (Nov. 29, 2022); at 3.14% for the corresponding week in 2021 (Nov. 30, 2021); and at 2.83% for the corresponding week in 2020 (Nov. 30, 2020), according to Mortgage News Daily data.

“Speeding up of annual home price growth reflects much of the pent-up demand that exists in the housing market amid very low inventories,” said Dr. Selma Hepp, chief economist at CoreLogic.

Hepp added, however, that home prices are feeling the weight of high mortgage rates. Said rates could slow the rate of price growth in the coming months.

“Still, despite the dramatic increase in cost of homeownership, home prices have risen 6.6% so far this year — meaningfully beyond expectations given the rise in borrowing costs,” she said.

Also: The Average American Spends This Much on Rent — See How You Stack Up

Will Price Hike Trend Continue in 2024?

According to Bill Adams, chief economist for Comerica Bank, house prices are forecast to rise modestly in 2024 as high mortgage rates restrain buying power and sales.

“Mortgage rates have surged from historic lows to multi-decade highs and sidelined both priced-out buyers and sellers who don’t want to forfeit cheaper mortgages and tax assessments locked in years ago,” he said.

Adams added that the housing market has shifted from a lopsided seller’s market in 2021 and early 2022 to one where supply and demand are roughly matched.

“That slowed house price increases in 2023 and will likely deliver another slow year of house price increases in 2024,” he added.

Lower Rates May Ease Price Pressure

The combination of high prices, low inventory partly due to homeowners who’d rather stay put due to the low mortgages they secured a few years ago and exploding mortgage rates have left many would-be homebuyers on the sidelines.

Hannah Jones, senior economic research analyst for, explained that home prices have climbed through the year as tight inventory has kept homebuying relatively competitive, despite lower levels of demand.

“Moving into 2024, mortgage rates are expected to ease, which could bring down the cost of financing a home purchase,” she said.

She added that while tight inventory conditions will keep upward pressure on home prices until housing supply picks up, falling mortgage rates could indicate more affordability ahead.

Ease in Rental Market

Although high home prices and elevated mortgage rates mean that financing a home purchase remains out of reach for many households, the rental market offers a glimmer of hope, according to Jones.

In October, the U.S. median rent continued to see a year-over-year decline for the sixth month in a row, down -0.5% for 0-2 bedroom properties across the top 50 metros, according to data.

Yet, while the median asking rent was $1,729, it was still $326 — 23.2% — higher than at the same time in 2019.

“Rental properties, especially more affordable units, were snapped up quickly in the second quarter of 2023, indicating strong rental demand amid waning demand in the for-sale space,” said Jones.

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This article originally appeared on Real Estate: Housing Prices Are Up 6.6% Since January — Will Trend Continue in 2024?