The key question for many house hunters and sellers in 2024 is whether the property market will be any easier to navigate this year?
A historic low in housing inventory coupled with some of the highest mortgage costs in 20 years made 2023 challenging for anyone who wanted to buy or sell property.
While 2024 might be a bit of a slow burn, most market predictions are optimistic and the National Association of Realtors expects to see four interest rate cuts, starting by mid-year.
Just what will drive buyer and seller optimism as the market opens up?
Buying costs
This is the big one if you’re upgrading or seeking to purchase your first home. Last year, a post-Covid inflation spike powered interest rates and mortgage costs to their highest point in nearly 25 years. With inflation now at 3%, this unfavorable dynamic should be history.
Wages climbing
Predictions of wages rising at 4% will provide buyers with more spending power. Combine this with a forecast of a 0.2% rise in property prices, and we’ll begin to see homes becoming more affordable.
Sellers return
Economic and price stability will bring sellers back into the market after an 18-month absence. They’ve been shy because of the high interest rates. Most have loans of less than 5% interest, and the recent rate is tipping into the 7% territory. As mortgage costs descend, the number of homes on the market will rise.
Flippers and fixers
Price stability is also returning to the construction and materials markets. While nothing is as cheap as it was, at least there is a reasonable visibility to prospective costs. So, we’ll see a rise in demand for fixer-uppers as buyers look to flip a property.
Privacy push
Many pundits, including those on the real estate website Zillow, predict first-time buyers will value privacy in 2024 and possibly move away from targeting duplexes and apartments in favor of single-family homes.