In 2023, the U.S. housing market experienced a dramatic slowdown, with soaring mortgage rates driving home sales to their lowest point in almost three decades. The year was also marked by extremely limited housing inventory and rising inflation, making affordability an even bigger challenge for potential homebuyers. Entering 2024, there are signs of a positive shift in the real estate market. Mortgage rates have started to come down since hitting a 23-year high in mid-October and are expected to keep falling (albeit gradually) throughout the year. These lower mortgage rates should draw buyers and sellers back to the market, increasing home sales and inventory. For buyers and sellers who spent the past year on the sidelines, the burning question remains: “How is the housing market right now?” We’ve put together a comprehensive guide to help you understand the current housing market and what the future may hold. From stabilizing home prices and slightly lower mortgage rates to a rebound in inventory and a surge in single-family housing construction, these are the trends we predict could shape the housing market in the months to come. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), expects home prices to stabilize in 2024, with a projected 0.9% annual increase bringing the median home price to $389,500. Similarly, BrightMLS, a Mid-Atlantic regional multiple listing service, forecasts a 1.5% rise in home prices, reaching a median of $394,200. As per the latest NAR data from December 2023, the median existing-home price ticked up 4.4% from the same period a year earlier, with the typical home selling for $382,600. After mortgage rates skyrocketed to 8.45% on October 17 (the highest level in over 20 years for 30-year mortgage rates), they started a gradual decline. By the end of 2023, rates had settled into the 6.6% range, where they have since remained stable. The Federal Reserve recently announced that it plans to make three rate cuts in 2024, which could bring mortgage rates down to an average of 6.1%–6.6% by the end of the year, according to industry experts. Economists surveyed by Reuters predict these interest rate cuts are likely to begin in June if not May.What to expect in 2024: Predicted real estate trends
Home prices will increase ever so slightly
Mortgage rates will continue to fall
