SANTA ANA, Calif., October 7, 2024 —Today, Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its Q3 2024 VeroFORECASTSM, projecting an average nationwide appreciation of 3.1% over the next 12 months compared to the previous quarter’s forecast of 3.2%.
VeroFORECAST evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value.
The housing market is poised for modest appreciation over the next year amidst falling mortgage rates and increasing inventory. Mortgage rates have been falling steadily since August in anticipation of Federal Reserve rate cuts. In response to a softer labor market and inflation, the Fed lowered its key interest rate by 50 basis points in September 2024. While rising unemployment or concerns about economic uncertainty may slightly decrease demand, it is likely to be offset by the increased demand driven by lower mortgage rates. Many potential buyers have been waiting for prices or rates to decline, and they may see this as an opportunity to enter the market. Additionally, demand remains supported by the large millennial and Gen Z generations entering homeownership age.
On the supply side, inventory levels are expected to remain relatively unchanged over the next year. Although inventory has steadily increased over the last year, it remains well below pre-pandemic levels. This is because many homeowners have mortgage rates below 4%, making it less likely for them to move. To incentivize a significant number of people to move, mortgage rates would need to drop significantly. Even if many people do move, a large portion will also be in the market to buy a home. The housing market is facing a significant shortage of homes, and this supply constraint is unlikely to be resolved soon. High construction costs have hindered new home supply so far, but there is a possibility that this situation may improve.
Considering these supply and demand factors, home prices are not expected to deviate significantly from their current trajectory. While lower mortgage rates may alleviate the financing burden to some extent, high home prices are leading buyers to focus on more affordable areas. Many cities in the Northeast and Midwest remain attractive options, combining job opportunities with desirable family-friendly environments. Additionally, the high cost of living in the sunbelt regions, including home insurance, HOA fees, and property taxes, is deterring many snowbirds and first-time homebuyers from moving to these regions.
The top ten housing markets for the next year are projected to be Rochester, Buffalo, and Syracuse in New York; Rockford and Springfield in Illinois; Reading (PA); Manchester (NH); Akron (OH); Springfield (MA); and Hartford (CT). Each of these markets is expected to grow between 5.9% and 7.6% over the next 12 months.
The 10 Strongest-Performing Markets Over Next 12 Months
| Rank | Markets |
Forecast Data Q3 2024 - Q3 2025 |
|---|---|---|
| 1 | ROCHESTER, NY | 7.6% |
| 2 | ROCKFORD, IL | 7.5% |
| 3 | READING, PA | 7.3% |
| 4 | SPRINGFIELD, IL | 7.2% |
| 5 | MANCHESTER-NASHUA, NH | 6.8% |
| 6 | BUFFALO-CHEEKTOWAGA, NY | 6.7% |
| 7 | SYRACUSE, NY | 6.4% |
| 8 | AKRON, OH | 6.1% |
| 9 | SPRINGFIELD, MA | 6.0% |
| 10 | HARTFORD-WEST HARTFORD-EAST HARTFORD, CT | 5.9% |
Five of the ten weakest forecast housing markets are in Texas, while three are in Florida. Both states experienced significant home price growth during the pandemic years. Builders responded to this demand by constructing new homes, but now these markets are facing rising inventory and reduced demand. Additionally, Florida’s condo crisis is contributing to the state’s cooling housing market. Many Florida metropolitan areas are experiencing a two-tiered trend, with single-family home prices continuing to appreciate modestly, while condo prices are declining due to rapidly increasing HOA fees, forcing many owners to sell their properties. Other markets are either overpriced or lack the desirable features that prospective homebuyers are seeking.
The 10 Least-Performing Markets Over Next 12 Months
| Rank | Metropolitan Statistical Area (MSA |
Forecast Data Q3 2024 - Q3 2025 |
|---|---|---|
| 1 | BEAUMONT-PORT ARTHUR, TX | -1.5% |
| 2 | ST. GEORGE, UT | -1.4% |
| 3 | NAPLES-MARCO ISLAND, FL | -1.3% |
| 4 | CAPE CORAL-FORT MYERS, FL | -1.1% |
| 5 | AUSTIN-ROUND ROCK-SAN MARCOS, TX | -1.0% |
| 6 | SAN ANTONIO-NEW BRAUNFELS, TX | -1.0% |
| 7 | CORPUS CHRISTI, TX | -0.9% |
| 8 | LONGVIEW, TX | -0.8% |
| 9 | BOWLING GREEN, KY | -0.8% |
| 10 | NEW ORLEANS-METAIRIE, LA | -0.8% |
VeroFORECAST Methodology
The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The current report is based on 325 Metropolitan Statistical Areas (MSAs) data, including 16,446 ZIP codes, 977 counties, and 82% of U.S. population covered. The report is a projected increase twelve months forward.
- Download the Q3 2024 – Q3 2025 VeroFORECAST results as a PDF infographic
- Download the 10 Strongest-Performing Markets graphic only
Source: Veros Real Estate Solutions
This information is intended for use by the media for economic reporting and should only be used for physical or digital publication or broadcast, in whole or in part, and must be sourced from Veros Real Estate Solutions. The company name must be visible on the screen or website if the data are illustrated with maps, charts, graphs, or other visual elements. For questions, analysis, interpretation of the data, or permission to reproduce, contact communications@veros.com.
About Reena Agrawal, Research Economist
Reena Agrawal has a Ph.D. in Economics from Vanderbilt University. She has fifteen years of experience in macroeconomic forecasting, sectoral research, feasibility studies of complex projects, and preparing reports for multi-national clients.
About Veros Real Estate Solutions
A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros’ services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit www.veros.com or call 866-458-3767.
Media Contact
Heather Zeller, Vice President of Marketing
communications@veros.com
(714) 415-6300
Original Source via Businesswire
