![]() ![]() Housing stock remains near historic lows-especially entry-level supply-which has propped up demand and sustained ultra-high home prices. “I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm. With many homeowners “locked in” at low interest rates or unwilling to sell due to high home prices, demand continues to outpace housing supply-and likely will for a while. “e’re definitely looking forward to a better housing market in 2024 as interest rates start to settle around 6% or even lower,” says Jewgieniew. ![]() Nonetheless, Kuba Jewgieniew, CEO of Realty ONE Group, a real estate brokerage company, is optimistic about a recovery this year. Yet, Gumbinger predicts it could be a while before we return to those rates. He adds that mortgage rates returning to a more “normal” upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. “Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound. However, when mortgage rates finally go on the descent, Gumbinger says don’t hope they cool too quickly. For the week ending March 7, the 30-year fixed mortgage rate stood at 6.88% ![]() “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”Īnd, of course, mortgage rates would need to cool off-which experts say is imminent, despite rates edging back up toward 7%. “For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. Will the Housing Market Finally Recover in 2024?įor a housing recovery to occur, several conditions must unfold. “If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast. Moreover, the fluctuation will vary regionally and depend strongly on local market supply.Ĭhief economist at First American Financial Corporation Mark Fleming predicts a “flat stretch” ahead. home prices declined in December for the second consecutive month, according to the latest S&P CoreLogic Case-Shiller Home Price Index, home prices year-over-year jumped 5%.Įxperts anticipate a slower rise in 2024 home prices compared to recent years. “The recent boomerang in rates has dampened already tentative home-buyer momentum as we approach the spring, a historically busy season for home buying,” said Sam Khater, chief economist at Freddie Mac, in a press statement. Elevated mortgage rates, out-of-reach home prices and record-low housing stock continue to make for a perfect unaffordability recipe. Essentially, all of the 2023 headwinds remain. ![]()
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