Morgan Stanley: Home Prices Could Drop Up to 5% in 2024 if High Mortgage Rates Persist

Home prices could drop up to 5% in 2024 if mortgage rates stay around 8%, per Morgan Stanley.

Higher mortgage rates are sidelining buyers, leading to less demand and potentially lower prices.

Median existing home prices rose 2.8% in September 2022 from a year ago despite limited inventory.

Morgan Stanley forecasts 10-year Treasury yields will fall in 2024, which may bring mortgage rates down.

Home sales sank to 13-year lows in September as high rates and low inventory deterred buyers.