Exploring the prospects of the real estate market in 2024? Wondering about the trajectory for homebuyers and sellers after facing challenges in 2023, including higher mortgage rates and a shortage of available homes? Let's delve into what lies ahead.
Encouragingly, industry experts are expressing optimism, suggesting that we may be on the brink of positive developments.
1. Mortgage Rates on a Downward Trend
In a welcome shift, mortgage rates have begun a descent, offering hope to those grappling with affordability issues. Mark Fleming, Chief Economist at First American, points out the potential for further decreases, stating that mortgage rates have already stepped back from recent peaks, with the possibility of further declines. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), echoes this sentiment, asserting that the market is becoming more favorable for homebuyers entering 2024.
2. Potential Expansion in Housing Supply
As rates show signs of easing, a surge in housing market activity is anticipated, with more buyers and sellers re-entering the fray. This renewed dynamism could lead to an increase in the supply of homes for sale, a trend already gaining traction. Lisa Sturtevant, Chief Economist at Bright MLS, predicts a loosening of supply in 2024, with even homeowners previously considered 'locked in' to low rates finding reasons to list their homes due to evolving family and financial circumstances.
3. Moderation in Home Price Growth
The positive developments extend beyond mortgage rates, as experts anticipate a moderation in home price growth. Despite ongoing low inventory levels, the Home Price Expectation Survey (HPES) from Fannie Mae reveals that the panel foresees home price growth at 5.9% in 2023, followed by a deceleration in 2024 and 2025, with growth rates of 2.4% and 2.7%, respectively.
In summary, the outlook for 2024 appears promising for the housing market. Whether you are contemplating a move next year or engaging in real estate transactions, early signs indicate a positive shift. According to Mike Simonsen, President and Founder of Altos Research, 2024 is poised for slight home price gains, a gradual easing of inventory constraints, and a modest increase in transaction volume. In essence, the U.S. housing market is on an upward trajectory in 2024.
Bottom Line:
Experts are enthusiastic about the potential developments in the housing market in 2024. If you are considering buying or selling a home in the upcoming year, staying informed about the latest forecasts is crucial. Partnering with a trusted real estate agent can provide you with the insights and guidance needed to navigate the evolving landscape successfully.
