2024 Housing Market Outlook: What to Expect Next

The upcoming new year prompts contemplation on whether 2024 is an opportune time for real estate transactions. To make well-informed decisions, understanding the insights of experts regarding the future of the housing market is crucial. Surprisingly, the projections indicate a more optimistic outlook than anticipated. Here's the breakdown.

Experts Forecast Ongoing Home Price Appreciation

Take a look at the latest home price forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR):

 

The orange bars on the left reveal that, on average, experts predict a year-end price increase of approximately 2.8% for this year, followed by an additional 1.5% hike by the close of 2024. This is significant news, particularly given widespread expectations of a market crash in 2023. Contrary to those predictions, prices did not experience a significant decline this year. The underlying factor is the persistent shortage of available homes compared to the demand, creating an inventory crunch. This imbalance in supply and demand continues to exert upward pressure on prices as we head into the upcoming year.

Looking ahead, experts anticipate a continued increase in home prices next year, albeit at a slightly slower pace than in the current year. Despite the less substantial projected rise in 2024 compared to 2023, it's crucial to grasp that home price appreciation is cumulative. In simpler terms, if the experts' predictions hold true, the national average suggests that following a 2.8% increase in your home's value this year, it should see an additional 1.5% increase next year. This sustained growth in home prices underscores the long-term financial wisdom of homeownership.

Projections Show Sales Should Increase Slightly Next Year

While 2023 hasn’t seen a lot of home sales relative to more normal years in the housing market, experts are forecasting a bit more activity next year. Here’s what those same three organizations project for the rest of this year, and in 2024 (see graph below):

 

Anticipations suggest a modest increase in total home sales, which is positive news for both the housing market and individuals navigating buying or selling processes. The heightened activity in the upcoming year is beneficial for prospective buyers, creating more options in the housing market.

What do these forecasts indicate? The housing market is projected to experience increased activity in 2024. This can be attributed, in part, to the ongoing necessity for people to relocate due to various life changes such as job transitions, family expansions, or personal relationship adjustments. These significant life events continue to drive housing market activity regardless of overall market conditions. Furthermore, should mortgage rates decrease, it is likely to further stimulate activity in the housing market.

Bottom Line

For those considering buying or selling a home, staying informed about the housing market's future is crucial. Being aware of upcoming trends empowers you to make well-informed decisions. Connect with a local real estate agent to discuss the latest forecasts and strategize for your next move.

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