The housing market has been challenging over the past months, with home sale activity remaining stagnant last month as mortgage rates and home prices stayed elevated.
Some experts have insisted that the housing market will improve, while others said otherwise. However, there are several factors that experts said could shape the housing market in the second half of 2024, according to CNBC.
More Homes Are Likely To Come on the Market
Last year, the mortgage rate lock-in effect kept many homeowners with extremely low mortgage rates from listing their homes. Mortgage rates in 2023 peaked at 8% in October. Since then, the mortgage rate for the 30-year loan term has settled to 6.99% in the week ending June 6, 2024, according to Freddie Mac.
Newly listed homes have grown 2.1% from a year ago during the week ending June 1, per a weekly housing trends report by Realtor.com. In the same period, the inventory of homes available for sale also grew 35.5% year-over-year.
However, Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a release earlier this month that the boost in the supply of homes on the market would unlikely be enough to attract buyers.
Interest Rates Could Fall
Some experts believe the Federal Reserve will likely hold interest rates on June 12 during the upcoming board meeting. However, the National Association of Realtors' deputy chief economist, Jessica Lautz, said the Fed may cut interest rates by the fall of this year. Mortgage rates are also forecasted to fall to 6.5% in the fourth quarter of this year.
"It's very possible that they're ending up paying the same mortgage payment because they're purchasing a home that while has a lower interest rate, has a higher price point," Lautz added.
Home Prices Are Unlikely To Cool
The median home sale price in the US is $432,812, marking a 6% increase year-over-year in April 2024, according to Redfin data. Despite home sales falling, prices have not softened and are unlikely to fall nationally, Ostrowski said.
"It's hard to foresee prices really cooling or declining nationally. It seems likely we're going to see another record high for home prices this summer," he noted.
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