Realtors see rebound for housing market in 2024, spurred by lower interest rates

Western Pennsylvania’s housing market took a hit last year that real estate agents attributed to higher mortgage rates that priced some buyers out of the market and fewer homes being available for those ready to make a move.

“All the companies were down about 13¹⁄₂%,” said Dennis A. Cestra Jr., president of Howard Hanna Real Estate Services in Pennsylvania, West Virginia and Maryland.

John Petrack, executive vice president of the Realtors Association of Metropolitan Pittsburgh, with Realtor members in six Southwestern Pennsylvania counties, pegged the drop-off last year at closer to 15%.

Home sales in 16 Western Pennsylvania counties, from Erie to Greene, and east to Somerset, fell to just over 26,000 last year from about 29,600 in 2022, according to data from West Penn Multi List Inc., a McCandless-based real estate services organization.

Whatever the percentage decrease, the housing industry was hurt by the increase in interest rates for a 30-year mortgage.

That reduced the affordability of homes, and there was a lack of inventory for those who wanted to buy homes, said Chris Murphy, West Penn Multi List’s president.

The higher interest rates — which the federally chartered Freddie Mac said reached an average of 7.79% in late October — likely forced some to purchase a house that was significantly
different than the one they wanted, Murphy said.

For those whose homes were on the market last year, the price they got was up about 1% from 2022, Cestra said. The market was “highly competitive” last year for homes priced between $150,000 and $500,000, he said.

The average sale price as tracked by West Penn Multi List was $288,000 last year, up $15,000 from 2022.

Those looking to buy despite the rise in interest rates found that there were about 11% fewer homes listed for sale through the multi-list last year. There were just under 32,000 homes with for sale signs in the yard last year, compared to a little over 35,400 in 2022, according to West Penn Multi List.

A week into the new year, some in the region’s real estate industry offer some slightly different views on what’s in store for the next 51 weeks.

Cestra is not anticipating a boom year for the housing market.

“We’re going to be pretty flat, maybe 1 or 2 points higher,” Cestra said.

Petrack, however, sees the housing market becoming better this year.

“We’re probably looking at a much better year for the residential market,” Petrack said.

He attributes a brighter future for the housing market to pent-up demand for housing coupled with a drop in interest rates from 2023.

Interest rates that were close to 8% for some of 2023 fell to an average of 6.61% at the beginning of the year, based on data from Freddie Mac, which buys mortgages in the secondary market.

Those rates are forecast to decline steadily to 6.1% and then 5.5% by the fourth quarter of this year, according to the Mortgage Bankers Association, a Washington, D.C.-based trade organization.

If the…