Housing Market Predictions for 2024: When Will Home Prices Be Affordable Again?

What many had hoped would be a rosy spring home-buying season has turned into a thorny challenge for home shoppers already demoralized by a challenging market.

Stagnant Home Sale Activity and Upward Trajectory



In the past month, home sale activity remained stagnant as mortgage rates and home prices continued their upward trajectory. However, there’s a silver lining: more resale inventory has entered the market, which should help rein in home price growth, albeit only to some extent. Experts agree that true momentum will return once mortgage rates drop low enough to make homes more affordable and incentivize homeowners locked in at cheap rates to move.

The Impact of Mortgage Rate Cuts

While experts don’t expect an immediate rate drop, even a modest reduction—say, from 6.8% to 6%—could significantly increase buyers’ purchasing power. A recent study by Realtor.com and the National Association of Realtors (NAR) highlights this potential. But the question remains: when will rates ease?

Unaffected U.S. Home Prices

Despite persistently high mortgage rates, U.S. home prices posted an annual 6.5% gain in March—the ninth consecutive month of year-over-year increases. The S&P CoreLogic Case-Shiller Home Price Index hit new highs in six of the past 12 months. Encouragingly, certain regions are seeing resale inventory emerge, which should help slow the pace of home price growth this spring.

Existing-Home Sales Dip

The latest report from the National Association of Realtors (NAR) reveals that existing-home sales dipped 1.9% from March, with the annual sales rate also falling 1.9%. 

Conditions for Housing Recovery

Keith Gumbinger, vice president at online mortgage company HSH.com, emphasizes the need for higher inventories of homes for sale. This additional inventory would ease the upward pressure on home prices, leveling them off from peak levels. However, mortgage rates must cool off. Currently lingering around 7%, the 30-year fixed mortgage rate slightly dipped to 6.95% in June. But Gumbinger warns against rapid rate declines, which could wipe away inventory gains and cause home prices to rebound. A return to more “normal” rates (upper 4% to lower 5%) would help the housing market gradually return to 2014-2019 levels.

Severe Inventory Shortage

Despite more resale homes entering the market, the inventory shortage remains severe due to multiple headwinds.

Home Builder Sentiment

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which tracks builder sentiment, retreated into troubling territory in May, tumbling five points from 51 to 46.

New Home Sales

Will the housing market finally recover in 2024? Only time will tell.

Comments

Post a Comment

Popular posts from this blog

Rick Caruso’s Bold Plan: Rebuilding LA’s Wildfire-Hit Neighborhoods with Modular Homes

Image
In the wake of the devastating wildfires that recently swept through Los Angeles, notable real estate developer Rick Caruso has initiated a proactive approach to rebuilding affected communities. Through his nonprofit organization, Steadfast LA, Caruso is championing the use of modular construction to expedite the restoration process, particularly in areas like Altadena and the Pacific Palisades.  Steadfast LA: A Mission to Rebuild Founded by Caruso, Steadfast LA aims to accelerate the reconstruction of Los Angeles by cutting through bureaucratic red tape and mobilizing private-sector expertise. The organization’s mission is to restore communities, rebuild infrastructure, and ensure that families and businesses can return home as swiftly as possible.  Partnership with Samara: Implementing Modular Solutions A key initiative under Steadfast LA is its collaboration with Samara, a California-based company specializing in prefabricated homes. This partnership focuses on providing hi...
Read more

The New Luxury Migration: 5 Unexpected Cities Attracting Ultra-Wealthy Buyers

Image
For decades, America’s wealthiest individuals gravitated toward traditional power centers like New York City and Los Angeles. But a new trend is emerging—high-net-worth buyers are migrating to less conventional markets, reshaping the landscape of luxury real estate. According to the USA Wealth Report 2024 by Henley & Partners, these five cities have experienced the fastest millionaire growth over the past decade. For developers and investors, understanding the driving forces behind these shifts presents lucrative opportunities. 1. Austin, TX: The New Silicon Hills • Millionaire Growth (2013-2023): 110% • Luxury Market Entry Point: $2.1M Austin has transitioned from an artsy cultural hub into a major tech powerhouse. With corporate giants like Tesla, Oracle, Chevron, and Hewlett Packard Enterprise relocating, the influx of high-income professionals has fueled demand for luxury homes. Realtor.com® recently moved its headquarters from California to Austin, further solidifying the city...
Read more

Multifamily Market Outlook: 2025 & Beyond

Image
Multifamily Market Outlook: 2025 & Beyond By Daniel Kaufman | Kaufman Real Estate & Consulting Introduction The multifamily housing market is undergoing a shift in response to record-high supply levels, declining construction starts, and a changing interest rate environment. While the pipeline of under-construction projects remains high, new development is slowing, with 2026 expected to see the sharpest decline in new supply before a potential rebound in later years. For real estate developers and investors, understanding these trends is critical for timing acquisitions, project planning, and investment strategies in the multifamily sector. This report breaks down key takeaways from the Q1 2025 Yardi Matrix Multifamily Supply Forecast and what they mean for the short-term and long-term outlook of multifamily development. Short-Term Market Forecast: 2025–2026 Multifamily Completions Remain Elevated in 2025, But a Slowdown is Coming • 2025 will deliver approximately 525,000 new m...
Read more