Existing-home sales will reach 4.71 million in 2024, up from an anticipated 4.1 million in 2023, as mortgage rates decrease, home price appreciation slows and inventory increases, according to the National Association of Realtors (NAR).
That’s a 13.5% jump compared with 2023.
Although home price appreciation is forecast to slow, the median home price will nonetheless reach $389,500 in 2024 – an increase of 0.9% from this year.
“Metro markets in southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region,” says Lawrence Yun, chief economist for NAR, in a statement.
Yun expects rent prices to calm down further in 2024, which will hold down the consumer price index.
He predicts foreclosure rates will stay at historically low levels in 2024, comprising less than 1% of all mortgages.
Yun forecasts that U.S. GDP will grow by 1.5%, avoiding a recession, with net new job additions slowing to 1.7 million in 2024, compared to 2.7 million in 2023 and 4.8 million in 2022.
After eclipsing 8% in late 2023, he expects the 30-year fixed mortgage rate to average 6.3% and that the Fed will cut rates four times – calming inflationary conditions – in response to slower economic activity.
Yun also foresees 1.48 million housing starts in 2024, including 1.04 million single-family and 440,000 multifamily.
Austin, Texas, is forecast to be the top real estate market, based on pent-up housing demand, next year.
The top 10 housing markets for 2024 include the following:
- Austin-Round Rock-Georgetown, Texas
- Dallas-Fort Worth-Arlington, Texas
- Dayton-Kettering, Ohio
- Durham-Chapel Hill, North Carolina
- Harrisburg-Carlisle, Pennsylvania
- Houston-The Woodlands-Sugar Land, Texas
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
- Portland-South Portland, Maine
- Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
“The demand for housing will recover from falling mortgage rates and rising income,” Yun says. “In addition, housing inventory is expected to rise by around 30 percent as more sellers begin to list after delaying selling over the past two years. The selected top 10 U.S. markets will experience faster recovery in home sales.”