The housing market in 2023 was marked by extremely low home sales and surging mortgage rates. However, the forecast for 2024 is looking positive, according to several experts.
Home prices across the United States have continuously increased over the second half of last year, increasing the most in Atlanta and Charlotte in September. New home sales also dropped to an annual rate of 679,000 in October, far lower than the 725,000 new homes analysts expected to be sold in that month.
That being said, several real estate believe the market will see some improvements in 2024. Here are some of the latest forecasts.
Housing shortages may continue
The real estate market saw a shortage of homes for sale last year. Danielle Hale, chief economist for Realtor.com, believes the shortages will continue in 2024 but noted that homebuyers may see a small uptick in the construction of single-family homes.
"Despite this, households will have more options in 2024 from a small uptick in single-family home construction, and the completion of the large number of multifamily units that are under construction, the vast majority of which are destined to be rental homes," Hale told USA Today.
Home prices will fall 1%
Home prices are expected to drop by 1% in 2024, according to Business Insider, citing real estate firm Redfin. That being said, the real estate firm believes home prices will remain high, which will lead to more demand for rental homes.
Mortgage rates will come down slightly
Mortgage rates have fallen nine consecutive weeks, dropping to 6.61% for the 30-year term in the week ending Dec. 28, 2023, per Freddie Mac. Experts predict mortgage rates to drop further in 2024, although they believe it is unlikely to fall below 6%.
"Mortgage rates are likely to remain well above pandemic-era record lows because financial markets increasingly believe the country will avoid a recession in 2024," Redfin Chief Economist Daryl Fairweather told USA Today. "Mortgage rates will fall to about 6.6% by the end of 2024. The gradual decline in rates combined with the small dip in prices will bring homebuyers some much-needed relief."
House affordability will see some improvements
As mortgage rates come down slightly in 2024, experts believe home affordability will improve in some markets, falling to as much as 1.7% by the end of this year. That being said, the NAR believes the median home price will go up slightly in 2024 to $389,500.
