Buyers will finally see lower prices (-1.7%)
and mortgage rates of 6.8% (on average), but may scramble to find
inventory (-14%) as current owners happy with their low mortgage
rates and pandemic home purchases stay put.
SANTA
CLARA, Calif., Nov. 29,
2023 /PRNewswire/ -- Lower mortgage rates and easing
prices will help spark the beginning of an affordability turnaround
in 2024, according to the Realtor.com® 2024 Housing
Forecast released today. But the supply of existing homes will
still be tight and renting will remain a competitive option in most
markets. This year's forecast also includes price and sales
predictions for the top 100 U.S. metros (see table at bottom).
Overall in 2024, Realtor.com® forecasts that buyers
and sellers can expect:
- Average mortgage rates of 6.8%, with rates edging down
over the year to reach 6.5% by the end of the year.
- Home prices to ease slightly and drop by 1.7% after
generally increasing since 2012.
- Rents to drop by 0.2%, making renting a more
budget-friendly option than buying in most markets.
- A -14% year-over-year drop in inventory, as existing
homeowners with low mortgage rates stay put.
- Home sales to hold steady, rising 0.1% year over year to
4.07 million.
"Our 2024 housing forecast reveals the green shoots we've been
waiting to see in the housing market and should give buyers some
optimism after a grueling few years. Although mortgage rates are
expected to ease throughout the course of the year, the
continuation of high costs will mean that existing homeowners will
continue to have a high threshold for deciding to move, but we will
start to see some interest," said Danielle
Hale, chief economist for Realtor.com®. "Moves of
necessity – for job changes, family situation changes, and
downsizing to a more affordable market – are likely to drive home
sales in 2024. Home buyers will continue to seek out markets where
they feel like they get the most out of their dollar as they look
for homes that better meet their needs."
Key 2023 housing trends and wildcards
- Affordability will officially turn around in 2024!! In 2024,
the typical monthly purchase cost for the median priced home
listing is expected to be slightly less than $2,200/month, or about 35% of the typical
household income. That's an improvement from 2023, when purchase
costs ate up nearly 37% of income and the typical for-sale home
cost $2,240. This tick up in
affordability will give a foothold to some buyers trying to break
into the market. Buyers planning to get into the market this year
should use Realtor.com®'s Buying Power tool which uses
results from the affordability calculator to tag homes as
"affordable," "stretching," or "difficult" based on typical lending
criteria.
- Even more sellers hang back, but they could get motivated if
rates drop faster than forecasted. Despite the fact that builders
have been catching up, the lack of excess capacity in housing has
been obvious over the last few years. With home sales activity
forecasted to continue at a relatively low pace, the number of
unsold homes on the market is also expected to remain low. But if
rates drop faster than expected (which is possible given the
roughly half point decline seen in November
2023), this could lessen rate lock sooner and bring more
homes to the market than forecasted.
- Shiny new rental construction will hit the market. A once-hot
rental market has slowed down, with the rental vacancy rate rising
slightly, up to 6.6% in the third quarter of 2023, about where it
was right before the pandemic. In 2024, an increase in new rentals
will help push vacancy higher, closer to the 7.2% average seen from
2013-2019. While the surge in new rental options gives renters more
to choose from, the sheer number of renters will minimize the
potential price impact. The median asking rent in 2024 is expected
to drop only slightly below its 2023 level (-0.2%).
- Sellers should be ready to compete with new construction. Home
sales will likely be driven by moves of necessity in 2024. And even
with the lower inventory of existing homes, sellers will be
competing with new housing. Single-family home housing starts will
increase an estimated 0.4% in 2024. Sellers will need to look at
the new construction market in their area to make sure pricing and
marketing are competitive.
- Geopolitics and inflation are among 2024's wildcards: Even as
markets adjusted to Russia's war
in Ukraine, conflict in the
Middle East heated up to historic
levels in the 4th quarter of 2023. Both wars have the
potential to affect the global economy in ways that can't be fully
anticipated. On the domestic front, the 2024 election season, with
its attendant uncertainty, will be in full swing. And while
inflation is expected to continue to subside, anything that
reverses that trend could raise long-term interest rates, and in
turn nudge mortgage rates higher than expected. That might
discourage potential sellers from making a move and could keep
potential buyers on the sidelines, putting a damper on home
sales.
"Buyers and sellers who are planning to get into the market this
year should be prepared. Tools like
Realtor.com®'s RealCost™ rent vs. buy and
affordability calculators can help buyers ensure they are making a
sound financial decision based on current interest rates and their
personal financial situation. Sellers can use the RealValue™ tools
in Realtor.com®'s My Home
to understand what their proceeds from a sale could be, and plug
this data into our mortgage payment calculator with current
interest rates to understand exactly how much they would pay each
month with a new home purchase. Additionally, everyone can see what
our projections mean for home prices around the country by checking
out the forecast layer in our RealView™ mapping tool," Hale
added.
Realtor.com®'s RealView™ mapping tool now
shows 2024 forecasted home price data by ZIP code right on the map.
To view this information, simply start a search on
Realtor.com® and select the map view to start
filtering. Then, select the Forecast map layer to see
predicted average home prices in your ZIP codes of interest. This
feature is included for the top 100 largest U.S. metros and is
available on the Realtor.com® Mweb and
desktop.
For more information about the Realtor.com®'s 2024
housing forecast, visit: realtor.com/housing-forecast-2024
Local Market Predictions – 100 Largest U.S. Metros (in
alphabetical order)
Metro
|
2024 Sales
Growth % y/y
|
2024 Price
Growth % y/y
|
Akron, Ohio
|
3.2 %
|
3.2 %
|
Albany-Schenectady-Troy, N.Y.
|
1.1 %
|
3.7 %
|
Albuquerque,
N.M.
|
-4.1 %
|
5.2 %
|
Allentown-Bethlehem et
al, Pa.-N.J.
|
2.2 %
|
5.0 %
|
Atlanta-Sandy Springs
et al, Ga.
|
-15.8 %
|
0.4 %
|
Augusta-Richmond
County, Ga.-S.C.
|
5.8 %
|
1.8 %
|
Austin-Round Rock,
Texas
|
-11.7 %
|
-12.2 %
|
Bakersfield,
Calif.
|
13.4 %
|
2.3 %
|
Baltimore-Columbia-Towson, Md.
|
-3.1 %
|
4.6 %
|
Baton Rouge,
La.
|
-20.4 %
|
-5.6 %
|
Birmingham-Hoover,
Ala.
|
-4.9 %
|
-1.5 %
|
Boise City,
Idaho
|
-3.2 %
|
-3.4 %
|
Boston-Cambridge-Newton, Ma.-N.H.
|
-0.6 %
|
-0.6 %
|
Bridgeport-Stamford-Norwalk, Conn.
|
-1.3 %
|
7.2 %
|
Buffalo-Cheektowaga et
al, N.Y.
|
8.3 %
|
3.9 %
|
Cape Coral-Fort Myers,
Fla.
|
-3.7 %
|
-2.9 %
|
Charleston-North
Charleston, S.C.
|
-13.2 %
|
3.7 %
|
Charlotte-Concord et
al, N.C.-S.C.
|
-22.4 %
|
-0.9 %
|
Chattanooga,
Tenn.-Ga.
|
-3.6 %
|
2.0 %
|
Chicago et al,
Ill.-Ind.-Wis.
|
-9.2 %
|
1.1 %
|
Cincinnati,
Ohio-Ky.-Ind.
|
-3.9 %
|
4.1 %
|
Cleveland-Elyria,
Ohio
|
-1.2 %
|
2.8 %
|
Colorado Springs,
Colo.
|
-11.5 %
|
-1.7 %
|
Columbia,
S.C.
|
-12.3 %
|
-1.8 %
|
Columbus,
Ohio
|
-1.7 %
|
2.2 %
|
Dallas-Fort
Worth-Arlington, Texas
|
-12.9 %
|
-8.4 %
|
Dayton-Kettering,
Ohio
|
-2.9 %
|
4.8 %
|
Deltona-Daytona Beach
et al, Fla.
|
-3.7 %
|
-3.1 %
|
Denver-Aurora-Lakewood,
Colo.
|
-15.3 %
|
-5.1 %
|
Des Moines-West Des
Moines, Iowa
|
-5.6 %
|
9.9 %
|
Detroit-Warren-Dearborn, Mich.
|
-6.7 %
|
10.9 %
|
Durham-Chapel Hill,
N.C.
|
-1.5 %
|
5.8 %
|
El Paso,
Texas
|
6.3 %
|
4.6 %
|
Fresno,
Calif.
|
-6.0 %
|
-0.3 %
|
Grand Rapids-Wyoming,
Mich.
|
6.1 %
|
7.2 %
|
Greensboro-High Point,
N.C.
|
-1.2 %
|
3.3 %
|
Greenville-Anderson-Mauldin, S.C.
|
-12.4 %
|
1.0 %
|
Harrisburg-Carlisle,
Pa.
|
5.6 %
|
5.1 %
|
Hartford-West Hartford
et al, Conn.
|
3.1 %
|
9.1 %
|
Houston-The Woodlands
et al, Texas
|
-9.7 %
|
-4.5 %
|
Indianapolis-Carmel-Anderson, Ind.
|
-7.6 %
|
6.1 %
|
Jacksonville,
Fla.
|
-5.8 %
|
-0.5 %
|
Kansas City,
Mo.-Kan.
|
5.4 %
|
-1.2 %
|
Knoxville,
Tenn.
|
-5.9 %
|
7.2 %
|
Lakeland-Winter Haven,
Fla.
|
2.9 %
|
-3.5 %
|
Lansing-East Lansing,
Mich.
|
1.2 %
|
6.2 %
|
Las
Vegas-Henderson-Paradise, Nev.
|
11.1 %
|
-2.3 %
|
Little Rock et al,
Ark.
|
0.4 %
|
3.1 %
|
Los Angeles-Long Beach
et al, Calif.
|
9.2 %
|
3.5 %
|
Louisville et al,
Ky.-Ind.
|
9.1 %
|
1.2 %
|
Madison,
Wis.
|
3.9 %
|
-1.5 %
|
McAllen-Edinburg-Mission, Texas
|
-0.6 %
|
1.6 %
|
Memphis,
Tenn.-Ms.-Ark.
|
-10.8 %
|
-4.1 %
|
Miami-Fort Lauderdale
et al, Fla.
|
3.8 %
|
5.0 %
|
Milwaukee-Waukesha et
al, Wis.
|
0.2 %
|
1.1 %
|
Minneapolis et al,
Minn.-Wis.
|
-2.4 %
|
-0.9 %
|
Nashville-Davidson et
al, Tenn.
|
-11.4 %
|
-4.8 %
|
New Haven-Milford,
Conn.
|
3.5 %
|
3.5 %
|
New Orleans-Metairie,
La.
|
-1.1 %
|
3.1 %
|
New York-Newark et al,
N.Y.-N.J.-Pa
|
-10.8 %
|
3.0 %
|
North Port-Sarasota et
al, Fla.
|
1.3 %
|
-4.9 %
|
Ogden-Clearfield,
Utah
|
-15.1 %
|
-3.8 %
|
Oklahoma City,
Okla.
|
1.9 %
|
1.6 %
|
Omaha-Council Bluffs,
Ne.-Iowa.
|
1.1 %
|
4.5 %
|
Orlando-Kissimmee-Sanford, Fla.
|
3.7 %
|
2.2 %
|
Oxnard-Thousand
Oaks-Ventura, Calif.
|
18.0 %
|
3.3 %
|
Palm Bay-Melbourne et
al, Fla.
|
-6.1 %
|
2.3 %
|
Philadelphia et al,
Pa.-N.J.-De.-Md.
|
-13.4 %
|
3.8 %
|
Phoenix-Mesa-Scottsdale, Ariz.
|
4.4 %
|
-4.3 %
|
Pittsburgh,
Pa.
|
-8.5 %
|
6.9 %
|
Portland-South
Portland, Me.
|
8.0 %
|
-1.9 %
|
Portland-Vancouver et
al, Ore.-Wash
|
-25.6 %
|
-7.4 %
|
Providence-Warwick,
R.I-Ma
|
3.9 %
|
3.1 %
|
Raleigh,
N.C.
|
-17.0 %
|
3.6 %
|
Richmond,
Va.
|
-11.6 %
|
3.3 %
|
Riverside et al,
Calif.
|
13.8 %
|
2.0 %
|
Rochester,
N.Y.
|
6.2 %
|
10.4 %
|
Sacramento--Roseville
et al, Calif.
|
10.3 %
|
-1.3 %
|
Salt Lake City,
Utah
|
-10.2 %
|
-4.1 %
|
San Antonio-New
Braunfels, Texas
|
-10.1 %
|
-9.4 %
|
San Diego-Carlsbad,
Calif.
|
11.0 %
|
5.4 %
|
San Francisco-Oakland
et al, Calif.
|
-0.8 %
|
-5.2 %
|
San Jose-Sunnyvale et
al, Calif.
|
-18.5 %
|
3.1 %
|
Scranton--Wilkes-Barre
et al, Pa.
|
5.5 %
|
6.3 %
|
Seattle-Tacoma-Bellevue, Wash.
|
3.9 %
|
-1.0 %
|
Spokane-Spokane Valley,
Wash.
|
3.6 %
|
-10.2 %
|
Springfield,
Mass.
|
10.5 %
|
4.2 %
|
St. Louis,
Mo.-Ill.
|
-2.3 %
|
-11.7 %
|
Stockton-Lodi,
Calif.
|
-5.8 %
|
-3.7 %
|
Syracuse,
N.Y.
|
3.4 %
|
6.4 %
|
Tampa-St. Petersburg et
al, Fla.
|
-5.3 %
|
1.2 %
|
Toledo, Ohio
|
14.0 %
|
8.3 %
|
Tucson,
Ariz.
|
2.3 %
|
-1.8 %
|
Tulsa, Okla.
|
-1.4 %
|
2.8 %
|
Urban Honolulu,
Hawaii
|
-8.9 %
|
-1.9 %
|
Virginia Beach et al,
Va.-N.C.
|
0.3 %
|
5.3 %
|
Washington et al,
D.C.-Va.-Md.-W.V.
|
-0.8 %
|
2.6 %
|
Wichita,
Kas.
|
-6.2 %
|
2.3 %
|
Winston-Salem,
N.C.
|
-8.0 %
|
0.3 %
|
Worcester,
Mass.-Conn.
|
9.1 %
|
4.8 %
|
|
Methodology
Realtor.com®'s
model-based forecast uses data on the housing market and overall
economy to estimate values for these variables in the year
ahead.
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
Media contact: press@realtor.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/realtorcom-2024-housing-forecast-housing-affordability-finally-begins-to-turnaround-302000133.html
SOURCE Realtor.com