The predictions for the housing market in the latter half of 2024 are met with uncertainty from experts. While some, like Glenn Kelman, CEO of Redfin, are optimistic about improvements, others, such as Jeff Ostrowski from Bankrate.com, are less certain. This divide in opinions highlights the complexity of the real estate market and the difficulty in accurately forecasting its future.
A key factor impacting the housing market is the mortgage rate lock-in effect, which seems to be wearing off according to Orphe Divounguy, a senior economist at Zillow. This effect, which kept homeowners with low mortgage rates from listing their homes, has contributed to an increase in newly listed homes and available inventory. Despite a rise in listings, the supply is not yet meeting demand, leading to challenges in converting listings to actual sales.
Changes in mortgage rates have also influenced buyer behavior. While the 30-year fixed-rate mortgage rate experienced fluctuations, affordability remains a top priority for buyers. Experts anticipate a potential interest rate cut in the fall, but rising home prices and limited housing inventory may offset any benefits from lower rates. As a result, buyers may find themselves paying similar mortgage payments even with lower interest rates due to higher price points.
Market trends vary across different metropolitan areas in the U.S. While some regions have experienced price softening, others have seen significant price growth. Despite recent declines in prices, buyers may not find relief in affordability, particularly in areas where prices rose substantially during the Covid-19 pandemic. The overall market continues to show resilience, with the majority of metro markets posting home price gains in 2024.
Summing Up the Market Outlook
The housing market predictions for the second half of 2024 reflect a mix of optimism and caution. While some experts anticipate improvements in the market, others highlight ongoing challenges such as affordability issues, limited housing inventory, and regional variations in price trends. The unpredictable nature of the real estate market underscores the need for careful analysis and monitoring to make informed decisions in the coming months.