As we enter the new year, many investors and homebuyers wonder if this will be the year to buy real estate. Will mortgage rates decrease? Will there be more homes on the market? Is a market crash on the horizon? Check out the video below where we go over the current state of the market and some housing market predictions for 2024.
2024 Housing Market Predictions
Curious about the future of the real estate market? Join us in today’s video as we dive deep into the burning questions: Will rates decrease? Are more homes hitting the market? And could a market crash be looming? We’ll break down the current market status and unveil 5 crucial predictions for the housing market in 2024. Stay informed and make smarter decisions in the ever-evolving world of real estate!
Key Moments in the Video
- 00:19 – Current State of the Housing Market
- 01:23 – 5 Housing Market Predictions for 2024
- 04:00 – Is 2024 the Year to Buy Real Estate?
Current State of the Housing Market
We’ve seen several changes within the housing market in the past few years. From low mortgage rates and affordable home prices to highly inflated rates and low inventory, it’s been hard for investors and homebuyers alike to navigate the changing housing market.
As of now, we’re starting to see changes within the housing market. Although we’re in the midst of winter and the market is relatively stagnant, many homebuyers and sellers are starting to think positively about the housing market. Looking ahead, we’re set to see more activity thanks to lower mortgage rates.
According to Lawrence Yun, chief economist for the National Association of Realtors, “We typically see housing inventory remaining low until February and then ramping up from March onward.” As such, we’ll likely see more activity in the housing market as we continue through the year. Next, we’ll go over some housing market predictions for 2024.
Housing Market Predictions for 2024
2023 was not the best year for people looking to buy homes. Mortgage rates skyrocketed, and home prices climbed to over $400,000 on average. So, when will things look up for potential home buyers? Let’s take a look at some housing market predictions for 2024.
- Listings and Home Prices Will Improve
- Mortgage Rates Will Fall Slightly
- Renting May Become More Popular
- May Be a Better Year to Buy a Home
- Home Sales Are Expected to Rise in 2024
Listings and Home Prices Will Improve
Over the past few years, we’ve seen increasingly high home prices and a lack of homes for sale. This record low inventory is mostly due to high mortgage rates “trapping” homeowners in their current mortgages, fearing that a new mortgage will cost more.
However, both Redfin and Zillow expect price and inventory trends to improve in 2024. Instead of people being scared to buy new properties, home sellers will likely be more worried that lower rates will affect their potential selling prices. Meanwhile, increased supply will create more competition between sellers, helping to lower home prices.
Mortgage Rates Will Fall Slightly
While mortgage rates are set to fall slightly in 2024, they aren’t expected to drop much in the near future.
That said, these rates are highly affected by the Fed’s interest rate policy, so many experts predict that rates won’t decrease until late this year. Unfortunately, that means that rates will likely remain stagnant in the near future.
For instance, Redfin predicts that rates will stay around 7% for the beginning of the year and slightly decline throughout the year. They predict that rates will fall to around 6.6% by the end of 2024. While this change is gradual, it may influence more people to look into buying homes this year.
Renting May Become More Popular
Since mortgage rates are still high and home prices are slow to fall, it may cause more people to continue renting instead of buying homes. In recent years, it’s become more and more of a trend for the younger generation to rent instead of looking to buy a home.
Additionally, more and more rental homes are being built this year. In fact, there are around one million new apartments currently under construction, with 440,000 to be completed this year. This will put more individuals in rentals and fewer people looking at purchasing homes.
May Be a Better Year to Buy a Home
In 2023, mortgage rates surged, and home prices skyrocketed. However, 2024 may be a better year for some people to purchase a home. Although home prices will likely remain higher than normal–and may even increase–experts expect prices in some areas to decrease slightly. In turn, more people may be more willing to buy real estate again. In fact, Redfin predicts 4.3 million home sales in 2024, up 5% year over year.
Additionally, the home-buying process could become more affordable and more streamlined. According to Redfin, in 2023, there were increased negotiations regarding fees and commission costs between buyers and buyers’ agents. That said, more competition between buyer agents may lead to more negotiation over fees for buyers’ benefit.
Home Sales Are Expected to Rise in 2024
As home inventory increases and mortgage rates slowly decrease, home sales are expected to go up in 2024. In fact, NAR predicts 4.71 million home sales in 2024, up 13.5% from 4.1 million in 2023. Additionally, an increase in new home construction will continue to boost inventory, making it more accessible for individuals to buy homes.
Is 2024 the Year to Invest in Real Estate?
Deciding whether or not to buy real estate in any market depends on several personal and market-based factors. For instance, you’ll want to evaluate your individual financial goals, market conditions, and risk tolerance. While experts suggest a stable housing market with a low likelihood of a crash, it’s crucial to consider specific factors like location, market trends, and personal financial circumstances.
Positive aspects, like millennials entering prime home-buying years, wage growth, and constrained inventory, may lead to a favorable real estate market. However, there are some potential risks, like the possibility of a price collapse in certain markets where investors are heavily involved.
Ultimately, you’ll want to conduct thorough research before making any investment decisions. Additionally, it helps to consult with real estate professionals while carefully evaluating local market conditions. The more research you do, the easier it will be for you to determine if 2024 aligns with your investment strategy and risk tolerance.
Protect Your Investments With BMG
Based on these housing market predictions for 2024, investors and homebuyers alike can consider their moves for this year. Is it the year to finally buy a home or invest in more rental properties? With home prices and mortgage rates slowly decreasing and more homes entering the market, it may become easier for more buyers to enter the market. Regardless of what you decide to do, investors need to consider all aspects of buying rental properties, including management.
Need More Advice? contact us today!
If you’re looking for a full-service management team to help maintain your rental properties, look no further than Bay Property Management Group. We can help you find qualified tenants, perform maintenance on your properties, and keep you updated on all things happening at your rental properties. Contact BMG today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
