With home prices and interest rates at historic levels and inventory still tight, many home buyers and sellers are feeling understandably nervous about the current housing market. In November 2023, the median sales price for an existing home was $387,600, and interest rates rose to nearly 8% briefly last year. But there’s some good news on the horizon as we head into 2024. Real estate experts and economists alike predict a shift in many factors that have made real estate somewhat challenging over the past several years. Here are some of the top real estate trends for 2024.
Trend #1 — Mortgage Rates Will Decrease
Mortgage rates, which reached a more than 20-year high in Q4 2023, will start to come down in 2024. However, expect to be disappointed if you are waiting for interest rates to return to pre-pandemic levels. Over the next year, rates will likely settle somewhere around 6% to 6.5% as the Federal Reserve works to keep a lid on inflation.
Trend #2 — Inventory Will Increase
Lack of supply has been a major issue in the housing market since the start of the pandemic. One reason many homeowners haven’t listed their homes is that they are holding onto mortgages with low interest rates. As mortgage rates drop, even just a little, homeowners and buyers who have been waiting for an opportunity will jump into the market.
Trend #3 — Home Sales Will Go Up
Unfortunately, the U.S. saw some of its lowest home sales numbers in 2023 simply due to a lack of inventory. There is pent-up demand in many major U.S. markets. As soon as builders build more homes and sellers put their homes on the market, home sales will go up accordingly.
Trend #4 — Home Prices Will Stabilize
Home prices have surged nationwide over the past decade, but that price growth may finally be slowing. On a national level, the median price of homes isn’t expected to drop significantly. But prices aren’t likely to drop when there is still an inventory issue. However, most experts predict that home prices will remain flat or increase up to 4% in 2024.
Trend #5 — Affordability Will Remain a Problem
There is no evidence to suggest we are heading toward a real estate market crash or even a correction in 2024. Unfortunately, some markets will remain overpriced, and affordability will continue to be an issue. However, some homebuilders are targeting the first-time buyer market to add additional supply and potentially create downward pressure on median prices.
Navigate These Real Estate Trends With an Experienced Agent
Whether you plan to buy or sell in the coming year, there’s no substitute for having a seasoned real estate agent in your corner who can guide you through the process. The Lafayette Team with EXP Realty has over 34 years of combined experience in a variety of niches, including first-time homebuyer purchases, lakefront property, active-adult homes, new construction purchases, and more. We know how to navigate these real estate trends for 2024 and can help you buy or sell in the Lexington or Lake Murray, SC area.