2024 Housing Forecast
If you're contemplating the prospect of acquiring or offloading a residence in the near future, your interest likely extends to the anticipated trends in the 2024 real estate landscape. The preceding year, marked by elevated mortgage rates, ambiguous home price narratives, and a shortage of available homes, posed challenges for both aspiring buyers and sellers seeking to make strategic moves. However, what lies ahead in the coming year?
Encouragingly, numerous industry authorities are buoyantly asserting that we've navigated a pivotal juncture and are now poised for a positive trajectory.
Anticipated Mortgage Rate Respite In a promising turn, mortgage rates have recently commenced a downward trend. This development instills hope for prospective buyers grappling with affordability concerns. Mark Fleming, Chief Economist at First American, envisions further declines, stating, "Mortgage rates have already retreated from recent peaks near 8 percent and may fall further..."
Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), echoes this sentiment, affirming, "For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market."
Potential Expansion in Home Inventory As mortgage rates ease, heightened activity is anticipated in the housing market, as more previously hesitant buyers and sellers re-enter the fray. An increase in sellers listing their properties could lead to a growth in the supply of homes for sale—a trend that has already commenced this year. Lisa Sturtevant, Chief Economist at Bright MLS, predicts, "Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%."
Moderation in Home Price Growth The positive trajectory isn't limited to mortgage rates; affordability is expected to improve further as home price growth moderates, despite overall low inventory. According to the Home Price Expectation Survey (HPES) from Fannie Mae, industry experts project, "On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively."
In summary, industry experts are forecasting a more favorable outlook for the housing market in 2024. If you're contemplating a move in the coming year, early indications suggest that we are on an upward trajectory. Mike Simonsen, President and Founder of Altos Research, encapsulates the sentiment: "We're going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume... All in all, things are looking up for the U.S. housing market in 2024."
In Conclusion Optimism abounds for the housing market in 2024. If you are considering buying or selling a home in the upcoming year, the most reliable way to stay abreast of the latest forecasts is to collaborate with a trusted luxury real estate agent.
