The 2024 housing market is full of uncertainties, but the consensus is that mortgage rates will come down, prices will level off and there will be more for sale next year, all of which would bode well for buyers.
No forecast predicts any dramatic shifts.
All forecasts see mortgage rates moving lower in 2024, provided the Federal Reserve ends its cycle of federal funds rate increases. Listing service Bright MLS has one of the most optimistic forecasts, predicting 30-year rates will range between 6% and 6.5% and end the year around 6.2%.
The National Association of Realtors sees 30-year rates averaging between 6% and 7% by spring.
Redfin’s forecast is for 30-year rates to fall to about 6.6% by the end of 2024.
No significant price correction is expected next year, though Redfin predicts average selling prices in the spring and summer selling season will be down an average of 1% from a year earlier.
“That is under the scenario where rates stay high. If rates were to drop, we would expect prices to go up, but we’re really only expecting a moderate decline in rates,” said Redfin chief economist Daryl Fairweather.
Zillow’s forecast is for average selling prices in 2024 to hold steady, falling at most 0.2% from 2023 levels.
“The cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do,” Zillow said in its forecast.
What the housing market needs is more homes for sale, and that will likely be the case in 2024, as owners who’ve been sitting on the sidelines reluctant to give up their low home payments become ready to move on.
“Pent-up sellers can’t wait any longer. People will begin to say ‘life goes on,’ listings will steadily show up and new home sales will continue to do well,” said Lawrence Yun, chief economist at the National Association of Realtors.
NAR predicts existing home sales will rise as much as 13.5% next year.
Redfin is equally optimistic about new listings in 2024.
“We are already seeing early signs of sellers showing interest in getting the ball rolling next year. I think that for the last year, or really two years, many potential sellers have been putting if off, but they can only put it off for so long,” Fairweather said.
Redfin’s forecast is for a more modest 5% rise in sales next year. Bright MLS’ forecast for sales in 2024 is a gain of 12.1%.
