As we move into the second half of 2024, there is a lot of anticipation and curiosity about the housing market’s trajectory. Experts have been analyzing data to forecast what homeowners, buyers, and sellers can expect regarding home prices, mortgage rates, and overall home sales. This article delves into the latest predictions and insights to help you navigate the housing market confidently.

Home Prices Are Expected To Climb Moderately

The Current State of Home Prices

Home prices are forecasted to rise at a more normal pace in the latter half of 2024. Unlike the steep increases seen during the pandemic, the appreciation will be more gradual. This shift can be seen in the latest forecasts from seven of the most trusted sources in the industry, which predict moderate growth.

Why Home Prices Will Continue to Rise

The primary reason for this continued appreciation is the supply of homes for sale. According to Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR):

> “One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”

While inventory has increased compared to the last couple of years, it remains low overall. This scarcity of homes continues to exert upward pressure on prices.

Implications for Buyers and Sellers

For potential buyers, this forecast suggests that entering the market sooner rather than later could save money in the long run, as prices are not expected to drop. Instead, they will continue to climb, albeit at a slower pace. For sellers, the ongoing appreciation means that their properties will likely continue to increase in value after the sale.

Mortgage Rates Are Forecast To Come Down Slightly

The Current Trend in Mortgage Rates

One of the most promising aspects for both buyers and sellers is the forecasted slight decrease in mortgage rates. According to predictions from Fannie Mae, the Mortgage Bankers Association (MBA), and NAR, mortgage rates are expected to decline somewhat.

Impact on Buyers

For buyers, even a small drop in mortgage rates can significantly impact monthly payments, making homes more affordable. Lower rates reduce the cost of borrowing, which can translate into substantial savings over the life of a mortgage.

Impact on Sellers

For sellers, lower rates mean an increase in the pool of potential buyers. More buyers in the market can lead to faster sales and potentially higher sale prices. Additionally, sellers who have been hesitant to list their homes due to high rates might find the environment more favorable.

Home Sales Are Projected To Hold Steady

Home Sales Forecast for 2024

The number of home sales in 2024 is expected to remain steady, with a slight increase compared to last year. The combined forecasts from Fannie Mae, MBA, and NAR suggest around 5 million sales, up from the 4.8 million homes sold in 2023.

Factors Influencing Home Sales

Lawrence Yun, Chief Economist at NAR, explains the contributing factors:

> “Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”

 What This Means for the Market

With more inventory available and mortgage rates expected to decrease, the market will likely see a modest increase in home sales. This trend suggests a more balanced market where both buyers and sellers can find opportunities.


FAQs

What is the forecast for home prices in the second half of 2024?
Home prices are expected to climb moderately due to continued low inventory, rising at a more normal pace compared to the steep increases seen during the pandemic.

Are mortgage rates expected to decrease in 2024?
Yes, mortgage rates are forecasted to come down slightly, which can make a significant difference in affordability for buyers and bring more buyers into the market.

How many home sales are projected for 2024?
Home sales are expected to hold steady or rise slightly, with forecasts suggesting around 5 million sales for the year.

Why are home prices continuing to rise?
Home prices are continuing to rise mainly due to the low inventory of homes for sale. Despite some increase in inventory compared to previous years, it remains insufficient to meet demand.

What impact will lower mortgage rates have on the market?
Lower mortgage rates will make homes more affordable for buyers, increase the pool of potential buyers, and potentially lead to faster sales and higher sale prices for sellers.

How will job gains influence the housing market?
Job gains contribute to economic stability, which can lead to increased confidence among buyers and sellers, thereby supporting more home sales.

Navigating the housing market can be challenging, but understanding the forecast can provide valuable insights. If you have any questions or need help with your real estate decisions, feel free to reach out.