Insights from the "Experts" on the Housing Market Outlook for 2024
If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to move. But what’s on the horizon for the new year? The good news is that many experts are optimistic we’ve turned a corner and are headed in a positive direction. Mortgage Rates Expected To Ease Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop: “Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .” 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.” The Supply of Homes for Sale May Grow As rates ease, activity in the housing market should pick up because more buyers and sellers who have been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. 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 Growth Should Moderate And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate, too, as inventory improves but is still low overall. 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.” To wrap it up, experts project that 2024 will be a better year for the housing market. So, if you’re considering moving next year, know that early signs show 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.” Bottom Line Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. Let’s connect.
Q2 Market Trends & Potential Implications
Here's an analysis of some of the Q2 market trends and potential implications: 1. Higher Interest Rates: As the Fed raises interest rates, it tends to slow down borrowing and spending, including in the real estate market. Higher interest rates make mortgage loans more expensive, so it can reduce the pool of potential buyers who can afford to enter the market. 2. Decreased Mobility Among Current Homeowners: With the rising interest rates, those with existing mortgages with lower interest rates may be less inclined to move. They would likely face higher financing costs by selling and buying a new home, providing a strong incentive to stay put. This can also contribute to a decrease in available inventory. 3. Growing Inventory Followed by Increased Buyer Activity: Initially, higher interest rates appeared to have contributed to growing inventory levels. This might have been due to lessened demand, causing homes to stay on the market longer. However, the subsequent increase in buyer activity could be the result of various factors, including: - Seasonal trends, as the real estate market often picks up in the spring and early summer. - Adjustments in pricing or incentives by sellers to attract buyers. - Possible economic factors such as improved employment or wage growth could offset the higher borrowing costs. 4. Potential Risks and Uncertainties: The mixed signals in inventory levels and buyer activity could indicate underlying uncertainties or instabilities in the market. If interest rates continue to rise or other economic factors change, the market might see further shifts. The comparison to New England weather—known for its unpredictability—captures this sentiment aptly. 5. Regional Differences: As with all real estate trends, regional variations can play a substantial role. Different markets might react to the higher interest rates in diverse ways, depending on local economic conditions, housing demand, supply constraints, and other factors. Specific information about local markets could provide additional insights. 6. Long-term Implications: The prolonged period of high interest rates could lead to a more balanced or stabilized market, where buyers and sellers adjust to the new financial landscape. However, the long-term effects are likely to be complex and may vary widely depending on broader economic trends and the continued policy direction of the Federal Reserve. If you like charts and graphs ... Q2 Condo Market Graphs | Q2 Single Family Market Graphs
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