
If you’re thinking about buying or selling a home soon, you probably want to know what to expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?
The good news is that many experts are optimistic: we have turned a corner and are headed in a positive direction.
Mortgage rates are expected to decline. Recently, mortgage rates have started to come down. This has offered hope to buyers facing affordability challenges.
Mark Fleming, chief economist at First American, explains how they are likely to continue to fall:
“Mortgage rates have already retreated from recent highs near 8 percent and may fall further.”
Jessica Lautz, deputy chief economist for the National Association of Realtors (NAR), says:
“For homebuyers who are taking out a mortgage to purchase a home and have been wary of rising mortgage rates in the fall, the market is becoming more favorable and there should be optimism heading into 2024 for a better market.”
The supply of homes for sale may grow. As rates fall, activity in the housing market should pick up because more buyers and sellers who have been holding off will return to action. If more sellers appear, the supply of homes for sale will grow, a trend we have already begun to see this year.
Lisa Sturtevant, chief economist for Bright MLS, says:
“Supply will ease in 2024. Even homeowners who have been characterized as being ‘locked in’ at low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new properties throughout the year, particularly as rates approach 6.5%.”
Home price growth should moderate. Falling mortgage rates are not the only positive sign of affordability. Home price growth is also expected to moderate as inventories improve, although they remain low overall.
As Fannie Mae’s Home Price Expectations Survey (HPES), a survey of more than 100 economists, investment strategists and housing market analysts, states:
“On average, the panel anticipates home price growth of 5.9 percent in 2023, followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.”
In short, experts are projecting that 2024 will be a better year for the housing market. So, if you’re thinking about doing something next year, know that early signs show we’re turning a corner.
As Mike Simonsen, president and founder of Altos Research, puts it:
“We enter 2024 with slight increases in home prices, easing inventory constraints a bit and slightly increasing transaction volume. All in all, things are looking good for the U.S. housing market in 2024.”
Bottom line
Experts are optimistic about what 2024 will hold for the housing market. If you’re looking to buy or sell a home in the new year, the best way to make sure you’re up to date with the latest forecasts is to partner with a trusted real estate agent.