2024 Housing Market: 4 Expert Forecasts
In 2024, a glimmer of hope emerges for weary homebuyers as the housing market is expected to stabilize after months of turmoil. While challenges like high mortgage rates and limited inventory persist, experts anticipate a slightly brighter outlook with rebounding home sales, moderating prices, and a gradual increase in listings.
However, these improvements are projected to unfold gradually, with housing affordability remaining a key concern despite slightly lower mortgage rates and prices, according to Danielle Hale, chief economist at Realtor.com. Amid these changes, several predictions are made for mortgage rates, inventory, home prices, and sales dynamics in the upcoming year.
Mortgage rates, a significant hurdle for homebuyers in 2023, experienced a shift from their two-decade highs. Factors like a slowing economy and the Federal Reserve’s indications of potential rate cuts have contributed to a recent decline in rates. While the trend seems downward, forecasts vary widely, with projections between 6.3% and 7.5% for 2024.
A potential silver lining for buyers may be the anticipated increase in housing inventory. Lawrence Yun, NAR’s chief economist, suggests a possible 30% rise in inventory compared to the previous year. Skylar Olsen from Zillow notes homeowners’ evolving perceptions of favorable rates for selling, potentially boosting housing supply.
Despite these changes, the dynamics that propelled soaring home prices are set to persist due to limited inventory. The current scarcity, with nearly 754,846 active listings compared to pre-pandemic levels averaging over 1 million homes, maintains pressure on prices. Consequently, most experts foresee a stabilization or slight decrease in prices by about 1% nationwide.
As for home sales, varying predictions span from a conservative estimate by Realtor.com, expecting a marginal 0.1% year-over-year increase, to NAR’s optimistic projection of a 13.5% surge. These projections hinge on the prospect of further decreasing mortgage rates that could attract more buyers and encourage potential sellers to list their properties.