The housing market is an ever-evolving and dynamic sector that affects the economy and the lives of people worldwide. As we move into 2024, the latest housing market news is of utmost importance to individuals and businesses alike. Whether you are a homebuyer, seller, investor, or simply interested in real estate trends, staying up-to-date with the latest developments can help you make informed decisions.
Latest Housing Market News in January 2024
The 2024 housing market is poised for changes, influenced by mortgage rates, market conditions, and regional dynamics.
Mortgage Rate Lock-In Effect
- The “mortgage rate lock-in effect” defined the 2023 housing market.
- The pandemic-era sub-5% mortgage interest rates led to homeowners holding onto their homes.
- Lower mortgage rates in late 2023 are indicating potential market improvements.
Existing-Home Sales and Prices
- Mortgage rate drops boosted existing-home sales in November, breaking a five-month decline.
- Housing shortages persist, but a slight uptick in single-family home construction is expected in 2024.
- Home price growth varies across markets, with some areas experiencing double-digit increases.
Mortgage Rates and Affordability
- Experts predict 30-year mortgage rates to hover between 6.1% to 7% in the first quarter, gradually declining throughout the year.
- Election year volatility may impact mortgage rates.
- Affordability challenges persist, requiring substantial household incomes to buy homes.
New Home Construction
- Anticipated gain in single-family housing construction starts in 2024 after declines in 2022 and 2023.
- Multifamily construction expected to experience a significant decline.
- Remodeling activity to remain flat in 2024, with aging housing stock requiring reinvestment.
2024 Market Projections
- Market conditions are expected to improve, but housing shortages will persist.
- Nationwide sales may see a modest uptick, with variations across different markets.
- Median existing-home prices continue to rise, and a dramatic rise in supply is seen as necessary to dampen price appreciation.
- Weary homebuyers may welcome a more stable and less volatile market.
Challenges Faced in 2023
- Home sales dropped by about 17% from their peak in February to their low in October.
- Home prices increased by 7%, reaching record highs, surprising many industry observers.
- Mortgage rates reached nearly 8%, the highest level in 23 years, contributing to the least affordable housing market in a generation.
- Existing-home sales dipped below 4 million units, creating a market with high competition and rising prices.
Mortgage Rates and Affordability
- Mortgage rates have fallen for nine consecutive weeks and are expected to drop further in 2024, though likely not below 6%.
- The Federal Reserve's interest rate hikes impacted demand, contributing to the housing market's challenges.
- Forecasts suggest mortgage rates averaging around 6.8% in 2024, providing some relief.
Improvements in Affordability
- Average mortgage rates at 6.6% allow the average American family to afford the median-priced home without exceeding the 30% income threshold.
- As rates come down, more homeowners may list their homes, increasing inventory and moderating prices.
- Forecasts indicate a slight decrease in home values, with Zillow predicting a 0.2% fall, and Realtor.com forecasting a 1.7% decrease.
Expected Rise in Home Sales
- NAR forecasts a 13.5% increase in existing home sales in 2024, reaching 4.71 million units.
- Continued growth in new home construction is expected to boost inventory.
- Predicted top-performing markets include Austin, Texas, and other metro markets in southern states.
Positive Signals in 2024
- Inventory is slowly increasing, providing more options for buyers in the upcoming spring.
- Sales rates are climbing, with more homes going into contract compared to the previous year.
- Home prices are inching up, maintaining stability and avoiding uncontrollable rises seen during the pandemic.
Affordability Challenges Persist
- Despite positive market trends, an intense affordability crisis continues to impact millions of potential homebuyers.
- While cheaper mortgage rates may improve payment affordability, increased demand may drive competition, putting upward pressure on prices.
- The current data suggests that the affordability crisis is unlikely to improve in 2024.
Inventory Growth and Market Dynamics
- The year concluded with 513,000 single-family homes on the market, nearly 5% more than the end of 2022.
- Sellers are gradually re-entering the market, contributing to a growing resale inventory.
- The number of single-family homes in contract has crossed a growth threshold, showing a 2.4% increase compared to the previous year.
Price Reductions and Market Stability
- Approximately 34.8% of homes on the market have undergone price cuts, within the “normal” range for the start of the year.
- The percentage of homes with price reductions is expected to decrease in the coming months as fresh inventory enters the market.
Home Price Trends and Forecasts
- The median price of single-family homes in the US is $415,000, reflecting a nearly 3% increase over the previous year.
- 2024 is projected to continue with price stability, as leading indicators, including inventory growth and sales rates, remain positive.
- Q1 home price trends will play a crucial role in shaping the overall trajectory of the housing market in 2024.
While the housing market shows signs of improvement, challenges such as affordability and the delicate balance between supply and demand continue to shape the landscape in 2024.
Stay tuned for more updates on the housing market as we continue to monitor the situation. If you're looking for real estate investment avenues in 2024, get in touch with us for expert advice and guidance.
Our team of professionals can help you navigate the changing market and find the right opportunities for your needs. Don't wait, contact us today to learn more!