What to Expect in the 2024 Housing Market
If you’re planning to buy or sell a home in the near future, you’re probably curious about what the housing market has in store for 2024. In 2023, rising mortgage rates, mixed messages about home prices, and limited inventory posed challenges for both buyers and sellers. So, what can we anticipate in the coming year?
The good news is that many experts are feeling optimistic about the direction the market is heading.
Mortgage Rates Are Expected to Ease
Recently, mortgage rates have started to show a downward trend, offering hope to buyers grappling with affordability concerns. Mark Fleming, Chief Economist at First American, believes they may continue to decrease:
“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:
“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.”
The Supply of Homes for Sale May Increase
As mortgage rates become more favorable, the housing market is expected to become more active, with more buyers and sellers reentering the market. This increased activity may lead to a growth in the supply of homes for sale, a trend that has already begun in recent times. Lisa Sturtevant, Chief Economist at Bright MLS, explains:
“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 moderation in mortgage rates isn’t the only positive sign for affordability. Home price growth is also expected to slow down, although inventory remains relatively low. According to the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists and housing market analysts:
“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, experts are projecting a more promising year for the housing market in 2024. So, if you’re considering making a move next year, there are early signs that things are looking up. Mike Simonsen, President and Founder of Altos Research, sums it up nicely:
“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.”
Bottom Line
Experts are feeling positive about what 2024 has in store for the housing market. If you’re planning to buy or sell a home in the coming year, partnering with a trusted real estate agent is the best way to stay informed about the latest forecasts. Let’s connect to help you navigate the evolving market landscape.