2024 predictions from industry experts
Happy New Year! As the calendar flips to 2024, there are plenty of reasons for positivity, and we love sharing optimism with all of you. Today, we’re focusing on this year’s forecast from the National Association of REALTORS®.
NAR’s experts are honing in on “boring” words for 2024 – and honestly, we’d all welcome that after a few years of extreme swings. So, let’s dive into their findings, which paint a picture of a stabilizing, balancing housing market, thanks to modest price increases, lower interest rates and a healthy rise in sales.
We’ll all be keeping tabs on interest rates. No surprise here. Interest rates have been a topic of intense discussion over the past year, with record highs creating affordability challenges for many. Thankfully, the NAR brings a breath of fresh air with its prediction for 2024. Interest rates are expected to average around 6.3% throughout the year, marking a welcome decrease from the previous year’s peaks.
This reduction is due to the Federal Reserve’s response to declining inflation rates. As the Fed signals it will lower rates this year, the housing market will become more accessible, providing relief to buyers who have been priced out due to the high cost of borrowing. For the time being, all eyes shift to the end of January, which is the first opportunity the Fed has to slash rates this year after promising multiple cuts.
Home prices will continue to rise. As we enter 2024, the housing market is shaping up to be significantly different from the past few tumultuous years. NAR forecasts a period of stability in terms of pricing with a modest increase of 0.9% in the median sales price over the year. It may not seem like a lot, but any rise is good for homeowners and sellers, of course. It’s important to note that these changes will not be uniform nationwide. Regional variations will be significant, which underscores the importance of understanding local market trends and working with the best real professionals to help determine how all of this data and information affect their situations.
A double-digit rise in existing home sales could happen. If rates do continue to tumble, the strength of home prices shouldn’t deter buyers. After a year of relative stagnation, NAR says there is reason to believe a bounce back in sales is coming. In fact, it’s calling for a 13.5% increase in sales in 2024 (from 4.1 to 4.79 million.) For context, though, prior to 2023, the number of homes sold has only been below 5 million since 2013. Two key factors contributing to this uptick are the aforementioned lower interest rates and a gradual increase in housing inventory. More homes being listed, plus more affordable financing, should equal a resurgence of buyers eager to take advantage of a favorable market.
New construction homes will be popular for buyers, too. In fact, the National Association of Home Builders expects 2024 to be a bounce-back year for builders, too, compared to the last two. It’s estimating more than a million new homes will be built in the time frame. Even as new construction homes gained a larger share of the percentage of all homes (30% compared to the traditional 10-15%) bought in recent years, that has mostly been due to lack of existing home inventory as builders have been facing their own rising costs and other constraints. If you’re a buyer considering new construction homes, here are some things to keep in mind.
No matter how many of these predictions come true, our teams will be ready and able to guide your title and closing work to the finish line. We’ve built our reputation on being experienced, knowledgeable and friendly, and our teams are ready for anything 2024 throws at us. It’s all part of our promise to be a good community and transactional partner all year long.