2024 Market Forecast

While no one has a crystal ball regarding the real estate market in 2024, there are several factors which point to a bit of an upswing in the home market for both buyers and sellers. Some indictors include the following:

  • There has been growing pent-up demand since mid-2022, when the Federal Reserve began its aggressive 11-rate-hike cycle. Mortgage rates will likely continue to decline, thereby igniting demand during the historically strong spring season. The Federal Reserve has kept rates steady and mortgage rates have started to drop. The week ending October 26, 2023, 30-year fixed-rate mortgages averaged 7.79%. Just a few weeks later, for the week ending December 7, 2023, the average fell to 7.03%, according to Freddie Mac. Many experts agree on the general direction, where interest rates will fall somewhat in 2024 but not reach the low pandemic-era levels. Predictions range from 6.1% to 6.5% for a 30-year fixed rate mortgage. 
  • There is still a lower-than-average supply due to the “locked-in effect”—the disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates.
  • There is a growing demand for real estate due to the millennial generation having reached their home buying and family formation years. There are approximately 72.24 million millennials.
  • Home prices tend to lag the S&P 500 by 6-12 months. Hence, if the S&P 500 really gets back to an all-time high in 2024 (as many experts are forecasting), the median home price should eventually do so as well.

Below are the various 2024 home price forecasts by MBA, Fannie Mae, Freddie Mac, HPES, Goldman Sachs, NAR, Zillow, and Realtor.com.

The average 2024 housing price forecast by all eight sources is for an increase of 1.5%, which seems reasonable compared to the historical increase of about 3%.

What does this information mean for sellers?

There is the potential that there will be plenty of buyers on the market and sale prices should remain favorable for sellers.

What does this information mean for buyers?

The positive news in the forecast will hopefully bring more homes to the market, thereby putting less strain on demand. Also, interest rates will be lower than the highs experienced in 2023.

There is always the caveat that markets vary by region—even by city or neighborhood—and it is always wise to consult with your trusted local real estate agent to understand your specific market status.

 

Debbie Austin is a realtor associate with Keller Williams, Roseville and has been helping clients buy and sell property in the area for 19 years. If you have a specific real estate question you wish to see addressed, contact Debbie at (916) 223-8144 or visit debbieaustinrealty.com.