2024 Housing Market

The 2024 housing market will largely depend on a few key factors. Firstly, if mortgage rates decrease, it could significantly shape the market. Secondly, increasing the number of available homes for sale will play a crucial role. And finally, whether sellers will relinquish the locked-in lower interest rates or let life events dictate their selling decisions.

Mortgage Rates 2024

Mortgage rates are expected to decrease, although predictions about the exact timing and extent vary among top economists. When these rates drop, we expect to see more buyers entering the market. Lower rates mean greater purchasing power, encouraging those who have been waiting to make their move. However, relying solely on a wait-and-see strategy can be risky. While it might seem wise to wait for lower rates, this can lead to missed opportunities. As rates decrease, more buyers enter the market, potentially driving up prices. You could buy now and refinance later. But it's important to consider the equity you could be building in the meantime; even if you bought a home and nothing happened to the rates, you are still building equity.

Inventory Issues

However, it's uncertain if the housing inventory will be able to keep up with this potential increase in demand. We expect a more moderate rise in home prices, more in line with the pre-pandemic era. It's important to remember that the conditions during the pandemic – low rates and low inventory leading to significant price increases and home value appreciation – were an anomaly.

Home Price Appreciation Rate 2024

For 2024, we foresee a more moderate rate of appreciation in the housing market.

The 2024 housing market forecast appears promising, with most experts maintaining an optimistic outlook. The pace of home price increases is expected to decelerate while home sales are projected to climb. Although the inventory remains limited, the market is witnessing a higher influx of new listings than usual. This trend offers both buyers and sellers unique advantages.

Even though affordability continues to be a hurdle for buyers, the buyers’ active participation in the market is evident. The persistent demand suggests resilience.

Latest Real Estate Data

According to Zillow’s latest market report; “Despite mortgage rates reaching 23-year highs, low housing inventory levels are spurring surprisingly strong competition,

Depleted inventory stocks are gradually recovering, and price appreciation is slowing, but demand has remained resilient, and attractive, appropriately priced listings are moving quickly.”

Zillow predicts that home buyers will have a bit more breathing room in 2024, but only a bit. Buying a home will remain expensive.

NAR Chief Economist Lawrence Yun forecasts Existing Home Sales Will Rise by 13.5% Next Year and Mortgage Rates Will be Between 6-7% by Spring 2024.

"Lack of inventory is providing the support for high prices, but it's also making it super difficult for first-time buyers to enter the housing market."

Yun said the 30-year mortgage and Fed funds rates have likely crested.

"I believe we've already reached the peak in terms of interest rates," Yun said. "The question is when are rates going to come down?"

Yun forecasts that interest rates will drop to between 6-7% by the spring buying season and anticipates that more sellers will enter the market.

"Builders are back on their feet, up 5% in newly constructed home sales year to date," said Yun. "Builders can simply create inventory. In a housing shortage environment, builders are really benefiting."

He explained NAR's advocacy efforts are working to help create inventory, but it will take time.

"Pent-up sellers cannot wait any longer. People will begin to say, ‘life goes on,'" said Yun. "Listings will steadily show up, and new home sales will continue to do well. Existing home sales will rise by 13.5% next year."

Yun also said that international buyers have declined, but once they return to the market, there will be a boost in buying.

Conclusion

Experts predict a dynamic shift in the 2024 housing market, with lower mortgage rates and a balance between demand and inventory. This could lead to a more moderate price appreciation and create unique opportunities for both buyers and sellers. It is always a good time to sell your home or buy your dream home. There is a silver lining in every market.