2024 Q1 Housing Market Trends: What to Expect


2024 Q1 Housing Market Trends: What To Expect

What to expect in Q1 2024

The first quarter of the year is typically a slower period for real estate, attributed to colder weather and a preference among buyers and sellers to wait until closer to spring. Housing inventory is expected to remain low until February, with a subsequent increase in March. According to Lawrence Yun, Chief Economist of the National Association of Realtors, homebuying and open house visits tend to rise starting in March. Rick Sharga, CEO of CJ Patrick Company, anticipates the first quarter of 2024 to be a continuation of 2023, with relatively weak home sales and modest price increases. However, lower mortgage rates could stimulate buyer activity.

Navigating the Swift Evolution of U.S. Home Sales

Q1 mortgage rate projections

Prospective purchasers are more confident as mortgage interest rates have decreased from 23-year highs at the end of 2023. As of December 20, 2023, Bankrate's weekly national survey reports the average rate for a 30-year mortgage at 6.88. Forecasts suggest continued rate declines, with Greg McBride, Bankrate's Chief Financial Analyst, projecting an average of 6.75 percent for the 30-year fixed-rate mortgage loan this quarter. Despite some optimism, Shri Ganeshram, CEO of real estate investment site Awning, predicts a slight increase in rates, potentially reaching around 7.75 percent for 30-year loans.

Where sales activity and home prices are heading

While home sales are expected to improve in 2024, reaching 5.5 million combined new and existing home sales, according to Yun, the persistent housing shortage may lead to a 2 to 4 percent nationwide increase in home prices in the first quarter. Sharga, on the other hand, expects home affordability to improve with mortgage rates trending down and wage growth at around 5 percent annually.

Housing inventory predictions for Q1

The shortage of housing inventory remains a challenge for homebuyers, with demand continuing to outstrip supply. Mortgage applications have increased in response to lower rates, indicating a persistent supply shortage in 2024. Yun sees a silver lining, expecting approximately 30 percent higher inventory and more choices for buyers in 2024. However, Sharga believes that the supply of existing homes for sale is unlikely to rise significantly until mortgage rates decrease further.

Strategies for homebuyers and sellers

With Fed chairman Jerome Powell signaling potential rate cuts, housing experts are optimistic about more affordable mortgage loans. Buyers are advised to be prepared for competitive markets, exploring unconventional financing options and acting quickly on purchase opportunities. Sellers should follow best pricing practices to ensure top dollar for their properties, pricing homes correctly from the beginning to avoid stagnation.

Q&A Section

Q1: Will mortgage rates continue to decline throughout 2024?

A: Forecasts suggest further declines in mortgage rates, with experts like Greg McBride anticipating ongoing decreases.

Q2: How can buyers navigate competitive markets in the first quarter?

A: Buyers should explore unconventional financing options and be prepared to act quickly on potential purchases.

Q3: Are home prices expected to decreasein 2024?

A: No, experts anticipate a 2 to 4 percent nationwide increase in home prices due to the persistent housing shortage.

Explore the key trends in the Q1 2024 housing market, from mortgage rate projections to sales activity and inventory predictions. Gain insights into strategies for buyers and sellers in a competitive market. Stay informed and make smarter financial decisions in the evolving real estate landscape.