Whether you are thinking about buying or selling a home soon you probably want to know what to expect from the new year’s housing market. Last year in 2023 we saw mortgage rates on the high side, a lack of housing inventory, and some confusion about what headlines suggested about home price trends. The good news is that many experts are forecasting some positive direction for the real estate market.
Mortgage Rate Trends
The good news here is that home loan rates have started to come down. The pattern for them is to follow inflation and since that has declined, rates will now follow. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says: “For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”
Housing Supply Trends
As the mortgage rates start to ease, there should be more activity in the market where those who have put their move on pause will be picking it back up. If more sellers decide to put their homes on the market then we will see inventory increase which has slowly been happening towards the end of 2023. Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”
Home Price Trends
Mortgage rates moderating isn’t the only good sign for housing affordability. Home price growth is also expected to moderate too. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says: “On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.”
Ultimately experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs are indicating that we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it: “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.”
