Housing market predictions for 2024

As we look ahead to 2024, the housing market is poised to present unique challenges for both buyers and sellers. With high mortgage rates, soaring home prices, and a limited inventory, it’s crucial to understand the dynamics at play. In this post, we’ll break down the key factors shaping the 2024 housing market and offer insights from industry experts to help you make informed decisions.

The Current Landscape:

Low levels of inventory mean that sellers continue to have the upper hand in the housing market. High mortgage rates and steep home prices are dissuading would-be buyers. As of September 2023, the median sale price for an existing home in the U.S. was a hefty $394,300, marking the third consecutive month of year-over-year price increases. Additionally, the average 30-year mortgage rate had surged to 8.01 percent, the highest it’s been in over two decades.

The Experts’ Take:

Greg McBride, Chief Financial Analyst for Bankrate, notes that the Federal Reserve’s stance on inflation has led to higher rates, and this trend is likely to persist as long as the economy remains robust. While a sharp economic slowdown could bring rates lower, it’s important to consider the potential impact on home price appreciation.

What to Expect for Buyers and Sellers:

1. Housing Sales:

   • Existing-home sales declined by 15.4 percent year-over-year in September 2023, indicating a softer market. However, if mortgage rates dip in 2024, we can expect more activity from both buyers and sellers. NAR Chief Economist Lawrence Yun anticipates a modest increase in sales, but rates are likely to remain above 6 percent.

2. Housing Inventory:

   • The supply of housing remains low, with only a 3.4-month supply available as of September 2023. For significant improvement, there would need to be a surge in listings or a substantial influx of new-construction homes. While an extensive increase in inventory may be unlikely, Chief Economist Lawrence Yun foresees a slight uptick in 2024.

3. Home Prices:

   • Despite the high prices seen in recent months, it’s unlikely that home prices will decrease in 2024. Lawrence Yun predicts a rise of around 3 to 4 percent. Prices are closely tied to inventory levels, and unless demand falters, they are expected to remain stable.

Buyer’s or Seller’s Market:

With the current tight inventory, sellers continue to hold the upper hand. The scarcity of available homes means that each listing becomes a sought-after commodity. Without a significant increase in inventory, it’s unlikely that the market will shift towards a buyer’s market in 2024.

Conclusion:

The 2024 housing market presents a challenging landscape for both buyers and sellers. High mortgage rates, soaring home prices, and limited inventory levels require careful navigation. However, experts suggest that if rates cool in 2024, market activity may see an uptick. It’s essential to seek guidance from experienced local real estate agents to make informed decisions in this dynamic market.