Homebuyers in the US housing market were forced into a year-long state of uncertainty by rising prices and high borrowing costs, and the shortage of available real estate nationwide made matters worse.
Home prices fell precipitously in 2022, but they recovered for nine months in a row starting in January and recently reached new all-time highs. In the meantime, mortgage rates surged to levels not seen since the mid-2000s as the Federal Reserve increased the cost of borrowing.
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Ultimately, though, things seem ready to change, particularly in light of growing speculation that the Fed will relax monetary policy in the 2024 US housing market.
Top experts’ predictions for the housing market in 2024, from supply to price growth, are listed below.
Realtor.com predicted in early December that the average 30-year fixed mortgage rate would be 6.8% in 2019 as the Fed becomes more dovish. The rate dropped to 6.61% in the final week of the month.
Due to reduced pressure from rising borrowing costs, buyers may experience a slowdown in demand.
After rising 3% in 2023, the listing agency predicts a 1.7% decline in prices.
The volume of existing homes for sale will, however, drop 14% because mortgage rates at the level the firm predicts will still be higher than what 85% of current borrowers are paying.
“It will be a bit of a break after what have been pretty relentless home price increases,” Chief Economist Danielle Hale said.
According to Goldman Sachs, current sales will only marginally decline in 2024 before increasing to 4.24 million the following year.
New home sales will rise in the interim from this year’s in 2024, from 680,000 to 723,000.
That’s when the number of housing starts increases gradually, from 1.39 million to 1.335 million in 2024.
This year has seen a significant rise in the building of new homes as homebuilders took advantage of the housing shortage.
The sense of urgency and pressure will begin to lessen.”
The bank anticipates modest price increases in 2019.
Redfin: A 1% decrease in price US housing market
According to the real estate firm, by the end of 2024, the average 30-year mortgage rate will be 6.6%, which will result in a 1% decrease in home prices.
Chief Economist Daryl Fairweather stated, “Although many Americans will still be unable to afford homes, any improvement in the affordability crisis is a welcome development.”
In the meanwhile, 4.3 million homes will be sold, a 5% increase. Nevertheless, Redfin predicts that rising costs will increase demand for rent while priced-out Americans may begin to move in with their parents.
Zillow: Costs will level off.
The real estate platform predicted in a late-November note that while buyers shouldn’t expect a significant decline in home prices, the growth rate will slow down and allow Americans’ incomes to catch up.
In the upcoming months, mortgage rates are likely to stay where they are because of the ongoing slowdown in inflation, which makes an increase in rates unlikely.
“Taken together, the cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do,” researchers at Zillow stated.
Freddie Mae: Price increases will slow down.
This summer’s rates are not too far from what the government-sponsored mortgage finance agency predicted for 2024: an average of 6.7%.
According to Fannie Mae, existing home sales will gradually rebound, driving a surge in total home sales to 4.8 million. New home sales will experience a brief decline in response to a mild economic downturn, but building volumes will not ultimately decline as a result of the contraction.
The agency anticipates that prices will rise, albeit more slowly. It projects a 2.4% price increase in 2019 based on a survey conducted in October.
