As we step into the promising realm of 2024, the burning question on everyone's mind is, "What does the future hold for the housing market?" To shed light on this, we've gathered insights from leading market experts who share their forecasts and perspectives on the key factors shaping the real estate landscape in the coming year.
Mortgage Rates: A Favorable Outlook
Mark Fleming, Chief Economist at First American, predicts a positive trend, stating, "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), adds, "For home buyers wary of the autumn rise in mortgage rates, the market is turning more favorable, fostering optimism for a better market in 2024." Both experts align in projecting a decline in mortgage rates, creating a more advantageous environment for potential homebuyers.
House Supply Dynamics: A Shift Towards Expansion
Lisa Sturtevant, Chief Economist at Bright MLS, anticipates a loosening of supply in 2024. She notes, "Even homeowners 'locked in' to low rates will increasingly find changing family and financial circumstances leading to more moves and new listings, especially as rates approach 6.5%." This forecast suggests that as mortgage rates drop, more homeowners will be inclined to sell, consequently boosting the overall house supply.
Home Prices: A Deceleration in Growth
The Home Price Expectation Survey (HPES) from Fannie Mae, encompassing insights from over 100 economists, investment strategists, and housing market analysts, foresees a shift in home price growth. In 2023, the average panel anticipates a growth rate of 5.9%, followed by a slowdown in 2024 and 2025 with rates of 2.4% and 2.7%, respectively. While home prices are expected to increase, the pace is projected to be significantly slower compared to the preceding year.
Overall Optimism: A Positive Outlook for 2024
Mike Simonsen, President and Founder of Altos Research, concludes with an optimistic perspective, stating, "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." This sentiment echoes a collective belief among experts that the housing market is poised for positive developments, encompassing moderate price gains, improved inventory dynamics, and an uptick in transaction volume.
In summary, the consensus among market experts suggests that 2024 holds promise for a more favorable housing market landscape, characterized by lower mortgage rates, an expanding housing supply, and a deceleration in the growth of home prices. As we embark on the new year, these insights serve as a beacon of guidance for both homebuyers and sellers navigating the dynamic real estate landscape.
