Homebuyers looking for relief from the rising prices in today's housing market may see more pain as experts predict more price growth in 2024, according to an expert.
In an email sent to GOBankingRates, founder and CEO of House Buyers of America Nick Ron said he expects the average prices of homes across the United States to increase between 3% to 4% in 2024. However, he added that the prices would likely go down sometime next year in some places.
"At some point in 2024, I see a slowdown in price growth," he wrote. "The slowdown will be due to a combination of factors such as rising interest rates, an increase in the supply of homes, a decrease in demand, and affordability challenges for buyers. That said, I'm not anticipating a drop in prices nationwide. Rising construction costs and a slowing economy as a result of prolonged high-interest rates will also impact the housing market in 2024."
Ron's prediction echoed a forecast from Goldman Sachs, which predicted that home prices will increase by 1.8% this year and 3.5% by the end of 2024.
"While housing and, more generally, consumer fundamentals are in a much stronger position today, affordability for the incremental buyer is worse than it was at the peak in 2006 before the crash. Absent any negative shocks to the broader economy that would either boost the excess supply of homes on the market or fuel an uptick in unemployment, we continue to expect home prices to rise at a slow pace for the medium term by 1.8% by year-end 2023 and by 3.5% by year-end 2024 on a Q4/Q4 basis," the forecast read.
Housing Prices and Mortgage Rates in the U.S.
Their predictions come after the national median list price fell from $430,000 in September to $425,000 in October. Prior to that, CoreLogic reported that home prices rose 4.5% year-over-year in September.
In addition, mortgage rates have also seen a recent downtrend. On Monday, the 15-year fixed-rate mortgage was 6.250% from 7.250% Friday. The mortgage rate for the 30-year term also fell to 7.125% on Monday, which is 0.375 percentage points lower than Friday and down over 60 basis points from a month ago. Mortgage rates are expected to fall further in the coming months.
