The trends for buying and selling homes in 2024 indicate a housing market that may be more favorable for buyers than in recent years but with several complexities and uncertainties. Expert realtor Susan Gregory has some of the key trends to keep an eye on this year.
Experts predict a general trend of slightly lower mortgage rates in 2024. Organizations like Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors anticipate the 30-year mortgage rate falling below 7% in the latter half of 2024. However, the decline may be challenging, with potential large swings up and down. Importantly, rates are not expected to return to the sub-4% levels seen in the years before 2023.
Home prices are not expected to decrease significantly in 2024. The market has reached a persistent equilibrium with low supply and high demand. The strained financial situation of many buyers may prevent significant price increases. Thus, while a slight increase in home prices could occur, a major drop is unlikely.
There’s an increase in permits for the construction of single-family homes, which is expected to help address the housing shortage. More single-family houses are being built to balance the existing oversupply of multifamily units and under-supply of single-family homes. This increase in supply may eventually impact prices and availability.
Rate Lock-In Effect
Homeowners who refinanced or purchased homes with low mortgage rates in 2020 and 2021 may start to enter the market as sellers as rates decrease and equity builds up. This phenomenon, known as the “rate lock-in” effect, is expected to ease, potentially increasing the supply of homes for sale.
Real Estate Agent Payment Models
Legal challenges and lawsuits against the National Association of Realtors and real estate brokerages could lead to changes in how real estate agents are compensated. These changes might significantly affect how homes are bought and sold, though the exact impact remains uncertain.
The housing market’s inventory levels are a crucial factor. Some experts anticipate a modest increase in home inventory due to factors like rising interest rates and changing market dynamics, while others argue that new construction might lag, keeping inventory tight. The market in 2024 is expected to be either a continuation of a strong seller’s market due to high demand and limited inventory or a gradual shift towards a more balanced market, depending on regional and housing conditions.
While the 2024 housing market might offer more favorable conditions for buyers compared to 2023, factors like mortgage rates, home prices, new construction, and legal changes in the real estate industry will significantly influence the market dynamics. Buyers and sellers should stay informed and adaptable as the market continues to evolve.
Let an expert realtor guide you through the 2024 real estate market. Contact Susan Gregory for any questions and to get started on your buying and selling journey.