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2024 Prediction: Slower Growth in US Housing Prices, Gradual Recovery in Existing Home Sales
Jan 2, 2024
2024 Prediction: Slower Growth in US Housing Prices, Gradual Recovery in Existing Home Sales San Francisco
By   Internet
  • City News
  • US Real Estate Market
  • Housing Market Forecast
  • Housing Price Growth
  • Housing Supply
Abstract: In 2023, the US real estate market experienced a significant downturn, followed by a nine-month consecutive increase in home prices, recently reaching historic highs. However, high housing prices and borrowing costs have left homebuyers struggling for the past year. Simultaneously, the shortage of housing supply has further intensified the resistance to home purchasing.

With expectations of the Federal Reserve easing monetary policy, changes in the real estate market may occur.

Forecasts from major real estate institutions suggest that in 2024, the rate of housing price increases will slow down, mortgage interest rates will remain stable or slightly decrease, existing home sales will gradually recover, new home sales will experience a modest increase, housing supply will remain tight, and housing price growth will undergo some adjustments.

Realtor.com predicts that with the Federal Reserve becoming more moderate, the average 30-year fixed mortgage interest rate in 2024 will be around 6.8%. A slowdown in demand might be a significant factor leading to a decline in home prices. The institution expects a 1.7% decrease in home prices in 2024, compared to an average increase of 3% in 2023. This will be a brief resting period, but some pressures and urgency will begin to ease.

Goldman Sachs expects a slight decrease in existing home sales in 2024, followed by a rebound to 4.24 million units in 2025. At the same time, new home sales are projected to increase from 680,000 units this year to 723,000 units in 2024.

2024 Prediction: Slower Growth in US Housing Prices, Gradual Recovery in Existing Home Sales

By 2024, new housing starts are expected to see a slight increase, reaching 1.335 million units. Homebuilders will significantly increase new construction. Goldman Sachs anticipates a slowdown in housing price growth in 2024.

Real estate company Redfin anticipates that by the end of 2024, the average 30-year fixed mortgage interest rate will be around 6.6%, leading to a 1% decline in home prices. Home sales are expected to rise by 5%, reaching 4.3 million units. High costs will boost demand for rentals, and the number of Americans moving in with their parents may increase.

Real estate platform Zillow predicts that buyers should not expect a significant drop in home prices in 2024, but the rate of increase will stabilize to allow Americans' incomes to catch up.

Mortgage interest rates may stay at current levels as continued inflation makes it unlikely for rates to rise. Overall, the cost of homebuying is expected to stabilize in 2024, and if mortgage interest rates decrease, homebuying costs may also decrease.

Freddie Mac predicts that by 2024, the average mortgage interest rate will be 6.7%, not significantly different from the summer of 2023. Driven by the gradual recovery in existing home sales, the total volume of home sales is expected to soar to 4.8 million units.

A moderate economic downturn may result in a slight decrease in new home sales, but in the long run, the contraction will not reduce construction volume. Home prices will continue to rise, although the pace will slow down. The institution estimated in its October survey that home prices would increase by 2.4% in 2024.

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2024 Prediction: Slower Growth in US Housing Prices, Gradual Recovery in Existing Home Sales