As we enter 2024, the housing market remains a great interest and concern for many. With soaring home prices and limited inventory, potential homebuyers wonder when they might see some relief. Let's look at the current housing market and make some predictions for the year ahead.
Current State of the Housing Market
The housing market has been wild over the past few years, with home prices skyrocketing and inventory dwindling. According to the National Association of Realtors (NAR), the median existing home price for all housing types in November 2023 was $353,900, up 14.9% from November 2022. This steep increase has made homeownership increasingly out of reach for many, especially first-time buyers.
Mortgage rates that are declining are like Christmas presents that never really end. The average 30-year fixed fell below 7% in mid-December for the first time in four months after reaching a 2023 high in late October. According to Freddie Mac, the average 30-year fixed rate fell 28 basis points this week to 6.67%, marking the ninth straight week of declines. One-hundredth of a percentage point is known as a basis point.
One of the key factors contributing to the housing affordability crisis is the lack of available homes for sale. Inventory shortages have persisted, driving up buyer competition and leading to bidding wars in many markets. The limited supply of homes has been a significant driver of price increases, making it difficult for buyers to find affordable options.
Interest Rates and Affordability
While rising home prices have played a significant role in the affordability challenges, interest rates have also been a factor. Mortgage rates have been slowly creeping up, adding to the overall cost of homeownership. The combination of high prices and increased borrowing costs has created a daunting scenario for potential buyers.
Predictions for 2024:
Looking ahead to 2024, experts anticipate that the housing market will continue to face challenges, but some signs of relief may be on the horizon. Here are some predictions for the year.
a. Modest Price Growth
Home prices are expected to continue to rise more moderately than the rapid increases seen in recent years. This could provide some breathing room for buyers, although affordability remains a concern.
b. Increased Inventory
The housing inventory will improve in 2024 as more sellers may be motivated to list their homes amidst favorable market conditions. This could alleviate some pressure on buyers and slow down price growth.
c. Policy Interventions
Government and regulatory interventions may play a role in addressing housing affordability. Initiatives aimed at increasing housing supply, providing financial assistance to buyers, and addressing zoning and regulatory barriers could impact the market.
When Will Home Prices Be Affordable Again?
The big question on everyone's mind is when home prices will be affordable again. While predicting an exact timeline is challenging, it's clear that a combination of factors, including increased inventory, moderated price growth, and supportive policies, will make homeownership more attainable for a broader population segment.
The housing market predictions for 2024 suggest that while challenges persist, there may be some glimmers of hope for potential buyers. However, achieving true affordability will require a concerted effort from various stakeholders, including policymakers, industry players, and communities. As we navigate the year ahead, we must keep a close eye on market trends and remain cautiously optimistic about the prospect of a more balanced and affordable housing market.
Amidst the challenges of soaring home prices and limited inventory, the Kwon Home Group remains steadfast in its mission to empower individuals and families to make informed real estate decisions. We are committed to helping clients navigate the market with confidence and clarity by leveraging our expertise, extensive network, and innovative strategies.
As we anticipate potential shifts in price growth, inventory dynamics, and policy interventions, the Kwon Home Group is uniquely positioned to offer tailored guidance, strategic insights, and unwavering support to those seeking to enter the housing market or make impactful real estate investments.
In the year ahead, trust the Kwon Home Group to be your partner in unlocking opportunities, realizing dreams, and contributing to a more inclusive and accessible housing market for all. Let's embark on this journey together and turn aspirations into reality.