2024 Housing Market Forecast

2024 Housing Market Forecast: What to Expect

Overview

As we enter 2024, many potential buyers, sellers, and investors are questioning whether this will be the year we see a break in rising home prices and an improvement in housing affordability. This article dives deep into what we might expect from the housing market in 2024, covering key aspects such as inventory levels, buyer demand, mortgage rates, and the overall economic influence.

Economic Context

Currently, the Consumer Price Index (CPI) is at 3.5%, and the Personal Consumption Expenditures Price Index (PCE) is at 2.5%. These inflation metrics are crucial because they influence the Federal Reserve’s policies, which directly impact mortgage rates and, consequently, the housing market. Despite high inflation post-pandemic, the Fed has aggressively raised rates, now standing at a significantly restrictive 5.5%. However, with inflation expected to decline, there is speculation about potential rate cuts, which could lower to 4% by year’s end, altering mortgage rates and market dynamics.

Mortgage Rates and Market Predictions

Mortgage rates are expected to fluctuate, potentially decreasing to mid-five percent levels, which will be lower than the highs seen in recent years but not as low as pandemic levels. These changes will likely foster some market volatility, influencing both buyer interest and housing prices. If you are preparing to purchase a home and looking to explore your options, reach out to our mortgage officer Here for the most up to date information based on your personal financial circumstances.

Inventory and Market Dynamics

The housing market typically sees the lowest inventory levels at the start of the year, with gradual increases as the year progresses. 2024 is expected to follow this trend but will not lead to drastic changes in market dynamics. The supply will likely increase slightly due to lower mortgage rates encouraging some homeowners to sell. However, substantial market shifts would require significant changes in inventory, unlikely without factors like distressed sales, which remain low due to strong homeowner equity and employment rates.

Housing Prices

Home prices are predicted to increase by about 3-5% across most areas, influenced by slightly improved inventory and moderate demand growth. However, major shifts in housing prices are not anticipated unless there are significant economic changes.

Final Thoughts

When considering purchasing a home in 2024, it’s essential to focus on personal circumstances such as financial stability and long-term housing needs rather than trying to time the market. Each potential buyer or seller must evaluate their situation, as the real estate market can vary greatly by location and is influenced by many unpredictable economic factors.

Conclusion

The 2024 housing market is shaping up to be another year of moderate change, influenced by a mix of economic factors and market dynamics. While some opportunities for buyers and sellers will emerge, significant shifts in market trends are unlikely without broader economic turmoil or substantial changes in federal policies.

If you would like to see how these factors directly affected the value of your home, contact us for a custom property valuation.