US home prices to crawl higher as 30-year mortgage rates stick near 6%: Reuters poll
By Sarupya Ganguly
March 17, 20268:46 PM GMT+7Updated March 17, 2026
New home construction in California
Rain stops construction work at a Lennar housing development under construction in San Diego, California, U.S., March 11, 2025. REUTERS/Mike Blake/File Photo Purchase Licensing Rights, opens new tab
BENGALURU, March 17 (Reuters) – U.S. home prices will rise modestly this year and in 2027 as the market remains constrained by high mortgage rates and a shortage of affordable homes that will persist for years, according to housing analysts polled by Reuters.
Housing will not provide a boost to the slowing U.S. economy and there will be no near-term progress in the Trump administration’s aims to revitalize the market through cheaper mortgages, the February 27-March 17 survey released on Tuesday suggested.
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The Federal Reserve is increasingly likely to keep interest rates where they are for longer due to discomfort with inflation levels that were already running too high before the U.S. and Israeli war with Iran.
Home prices are forecast to increase just 1.8% this year and 2.5% in 2027, well below a key inflation figure used by the U.S. central bank to track progress toward its 2% inflation goal. The Personal Consumption Expenditures Price Index excluding volatile food and energy prices was 3.1% on a year-over-year basis in January, before the start of the war.
The S&P Cotality Case-Shiller 20-City Composite Home Price Index shows average home prices are up more than 50% since the COVID-19 pandemic, but rose only 1.4% last year, the weakest performance in 14 years. (USSHPQ=ECI), opens new tab
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NO PROSPECT OF IMMINENT TURNAROUND
Forecasts were little changed from three months ago even though the war has lifted benchmark U.S. Treasury bond yields and boosted oil prices by around 50%.
“The story’s one of the housing market basically not doing very much,” said James Knightley, chief international economist at ING.
“A squeeze on affordability has meant demand has dropped away significantly and supply is constrained as well, and I don’t see the prospect of an imminent turnaround.”
Many homeowners are reluctant to sell, as it would force them to give up long-term mortgage rates locked in during the pandemic, some at less than half the current roughly 6.2% average rate on a 30-year mortgage. That rate is already up from 6.1% in recent weeks.
