By Melissa Forte-Litscher
Ready for 2024’s housing trends based on some national resources? You can expect national home prices to end up with about a 2.8% increase for 2023. Based on projections from Fannie Mae, Mortgage Brokers Association and the National Association of Realtors, look for an additional 1.5% price increase in 2024. Despite false worries about a real estate crash in 2023, the imbalance between supply and demand keeps prices rising in most of our local areas. Experts do anticipate a livelier market in 2024 compared to the slower pace in 2023.
The Federal Reserve’s recent inflation measures might not significantly drop rates in 2024, but the economic impact of the pause in raising rates has helped slowly reduce mortgage rates over the last couple of months. Most recently an average 30-year rate was about 6.5% and rates are expected to land in the low 6% range and perhaps even to the upper 5% range by the end of 2024. This trend has already had a positive influence on buyers who have been waiting on the sidelines since the rates drastically went up, landing in the 8% range last October. Keep in mind though, that as more buyers enter the back into the market, that means more competition for the houses available.
Housing inventory remains tight. Local MLS reports indicate a limited housing supply with just a 3.5-month inventory available for purchase. Experts believe a six-month housing inventory is a more stable market. While a slight increase is projected, it doesn’t look to balance the market’s demand in the year ahead. Many builders are rapidly working to increase new construction inventory all around our area and more existing homes are slowly entering the market with the recent mortgage rate reductions.
High demand and limited choices might seem to create a challenge for buyers while favoring sellers. However, caution is advised on both parties as higher interest rates cause buyers’ purchasing costs to increase. Sellers may need to be flexible and consider concessions or even assist in rate reduction measures. According to insights from Florida REALTORS® chief economist Brad O’Connor and NAR’s Lawrence Yun, Florida’s market reflects the recent caution among buyers and sellers, especially regarding mortgage rate fluctuations. Experts recommend careful decision-making for both parties and advise you to lean on your agent’s negotiation skills, market knowledge and professionalism to assist you for the best outcome.
In conclusion, the 2024 housing market might pose hurdles in some areas, such as limited inventory and home price increases. There is hope that the potential relief in mortgage rates could alleviate some of those challenges. For buying or selling decisions amidst these crazy dynamics, seek guidance from a trustworthy local agent, as your unique situation matters well beyond market trends.
Happy New Year! When opportunity knocks at the door in 2024, allow me to unlock it for you, I’m at your service.
850.496.7444
Melissa@NextHomeCornerstone.com
destin-fwbrealty.com
