Major agencies are now predicting slower home price growth over the next year, potentially leading to new opportunity for priced-out buyers.
Freddie Mac has revised their forecast substantially.
"Our current house price forecast assumes an increase of 1.3% over the next 12 months and 0.4% over the subsequent 12 months," wrote Freddie Mac executive vice president and chief financial officer Jim Whitlinger on July 31. "This is a change from our forecast at the end of last quarter, which assumed 4.2% growth over the next 12 months and 2.8% growth over the subsequent 12 months."
A revision from 4.2% growth to 1.3% is likely welcome news to homebuyers who have struggled with higher-than-average price increases for years.
Major Housing Agencies Predicting Slower Home Price Growth
Freddie's prediction won't come as a surprise to those who keep an eye on price indices for the housing market:
- "U.S. house prices fell 0.2% in May," says the Federal Housing Finance Agency on July 29.
- Home prices rose 2.25% over the year ending May 31, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, published July 29. Over the last five years, they've risen at an annualized 8.67%.
- The National Association of Realtors® (NAR) reported on July 23 a 2.7% decrease in existing-home sales.
- Sales of new single-family houses in June 2025 were down 6.6% from June 2024 at a seasonally-adjusted annual rate of 627,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development on July 24.
So, nationwide, some home prices are falling while others are slowing. And sales are falling.
Big Price Decreases In Some Markets
But Realtor.com revealed stark regional variations when it wrote about the housing market on Aug 1. Some key metro areas saw price decreases in median list prices of between 4.0% and 4.9% over the past year. Those included:
- Austin, TX
- Miami, FL
- Chicago, IL
- Los Angeles, CA
- Denver, CO
However, in some other places, home prices have continued to rise, although typically at a slower pace than previously.
"In the South and West, home prices have seen notable double-digit declines since their 2022 peaks in some markets," said the article. "By contrast, markets in the Midwest and Northeast have experienced similarly large price gains over that same period."
And that works at a more granular level. Sought-after cities and neighborhoods can usually beat nationwide trends. So, you need to check local home prices where you hope to buy or sell before assuming you're in or out of luck.
First-Time Homebuyers Are All For Flatter Price Growth
Slowing home price appreciation is not good news for existing homeowners. Still, most have had a good run with mortgage borrowers collectively piling on an additional $280 billion in home equity in 2024 alone, according to Cotality, formerly CoreLogic.
Now, it's time for first-time buyers to have some luck. Previously, they've struggled to save for down payments and closing costs as sharply rising home prices have constantly moved the savings' goalposts.
This might be the perfect time to catch up and get their feet on the first rung of the housing ladder.
However, it's probably wise to act quickly, because, cruelly, this window of opportunity may be open only briefly. If enough newly motivated first-time buyers enter the housing market at once, that could push up home prices.
