USA Housing Market Predictions for 2024
As we enter an new year many Buyers are hoping that prices start to stabilise this year, the last few years we have seen limited availability, soaring mortgage rates and property price hikes. Last year mortgage rates surged in October racking new heights at 7.79%, the median price for a home in the US in October was just under $400,000, the fifth straight month of year-over-year price increases. 2023 we seen a phenomenon called the “mortgage rate lock-in effect” this brought the industry nearly to a standstill, putting downward pressure on everything from inventory levels to home sales. But some positive news is that mortgage rates have dropped steadily over the last seven weeks, averaging 6.61 % for a 30-year fixed mortgage. Even though mortgages rates are coming down the rates are still very high compared to previous years.Mortgage rates are likely to remain well above pandemic-era record lows because financial markets increasingly believe the country will avoid a recession in 2024,” says Redfin Chief Economist Daryl On top high of mortgage rates still being high we still have low inventory levels. Many first time Buyers still feel very negative about being able to afford a home. Lower mortgage rates will undoubtedly improve affordability for borrowers, but with that will come increased demand. This will keep home prices high and likely push them up even further. Finding a home for a first time Buyer in your given price range might become even trickier, and you may need to make a lot of offers before you get one accepted. A lot of experts are also saying dont expect to see and end to the shortage of homes in the US, another trend that is continuing. Odeta Kushi, deputy chief economist at First American stated “that a supply shortage is a very hard thing to undo, it will take years of accelerated new home construction to narrow the supply shortage gap from more than a decade of underbuilding,” One positive though is construction is now back on track, Robert Dietz, the chief economist for the National Association of Home Builders is forecasting a gain for single-family housing construction starts in 2024. This will be the first year of increase after declines in 2022 and 2023.“Due to low existing inventory, new construction has increased to approximately one-third of total single-family inventory in recent months when historically it was only 10% to 15%,” Dietz says. But how about property prices, are we going to see them go down this year ? Despite predictions that prices would fall last year they didn’t, as of October 2023, prices rose 6.3% last year, according to the S&P CoreLogic Case-Shiller index. High mortgage rates were a major challenge for the housing market last year, significantly slowing home buying demand. In spite of this, prices still rose. In fact most forecaster are saying by the end of this year we can see more price rises across the US. Fannie Mae’s recent survey of housing experts offers valuable insights into the future of the housing market, predicting a shift from the fast pace of 2023 to a more moderate rhythm in 2024 and 2025. The projected slowdown to 2.4% and 2.7% growth in 2024 and 2025, respectively, marks a significant departure from the anticipated 5.9% surge in 2023.Zillow’s updated predictions for 2024 anticipate the national, non-seasonally adjusted Zillow Home Value Index (ZHVI) to remain flat in 2024. It will be interesting this year to see how the different factors impact the US Housing Market, what will be the balance be like between demand and supply, will new policies be implemented to shape the market, will mortgage rates go up or down. One thing that is certain is we are looking at another year of low supply one way or another. Of course these are all just predictions but we can conclude that if you are planning to buy a house in the US is 2024 now is the time to start planning, overall it look like this year will be slightly better for Buyers but in a way it will be more challenging than 2023 due to prices and the competition in the market.
