The real estate market has always been a dynamic and ever-evolving sector. As we approach the year 2024, it's essential to examine the trends, factors, and predictions that are likely to shape the real estate landscape in the coming year. While no one can predict the future with absolute certainty, we can make informed projections based on existing data and prevailing economic conditions. In this blog, we'll explore some of the key trends and predictions for the real estate market in 2024.
1) Increase in Demand for Housing
One of the fundamental drivers of the real estate market is the demand for housing. Fannie Mae predicts in 2024 this demand is expected to increase by 10%, fueled by a growing population, urbanization, and changing demographics. Millennials, the largest generation in the United States, continue to reach prime home-buying age, driving a significant portion of the demand for both rental and ownership housing.
2) Increase in Sales Price
Prices are intricately connected with housing inventory. Sellers are likely to remain reluctant to give up their low interest rate for a much higher one, so inventory will remain constrained. That means that prices are unlikely to fall on a year-over-year basis, unless demand falters. Experts predict housing prices will continue to increase, however it will be at a slower rate of 3-4% year-over-year rather than previous years 5-10%.
3) Decrease in Interest Rates
We are already seeing interest rates steady out in the 7-8% range. Interest rates are likely to decline, slowly but steadily, over the year. This decline should begin once the Federal Reserve confirms that it’s done raising the Fed Funds rate for this cycle. But borrowers shouldn’t expect to see mortgage loans with 4% interest rates; it’s more likely that rates will gradually work their way down from 7%, and possibly end next year in the 5-6% range.
4) Will There be A Housing Recession?
Experts predict that there is no housing market crash looming in 2024. Lending standards are much more strict now than they were before the Great Recession, and with low inventory and high demand both continuing, the housing market is not likely to enter a recession in 2024.
Predictions conclude real estate will continue to be a seller's market throughout 2024. With an increase in housing demand, low inventory, and possibly the decrease in interest rates, buyers are expected to be on the hunt for homes. Sellers are expected to remain in their current homes not willing to forgo their low interest rate for higher prices and higher rates.
If you would like to speak further about 2024 market predictions and whether it's a good time for you to purchase or sell a property, speak to an expert on our team.