Housing Market 2024 | Bankrate
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Key takeaways
- Low levels of inventory mean that sellers continue to have the upper hand in the housing market.
- Mortgage rates have come down from their peak but are still high, and steep home prices are dissuading would-be buyers.
- If rates were to drop further in 2024, that would spur the market for both buyers and sellers.
With home prices historically high and inventory still very tight, many prospective sellers and hopeful buyers are feeling nervous about today’s housing market.
The median sale price for an existing home in the U.S. was $387,600 as of November 2023, the fifth straight month of year-over-year price increases. And after rising above 8 percent in October, the average 30-year mortgage rate was 6.88 percent as of late December 2023 — still higher than most homeowners’ locked-in rates, but a welcome reprieve from the recent 20-year highs.
Home prices, mortgage rates and inventory levels will all shape housing affordability in the coming year. Curious where these trends may go? Read on to learn what the experts predict for the 2024 housing market.
What will happen to the housing market in 2024?
Rates roughly doubled in 2022, thanks in part to the Federal Reserve’s war on inflation, and have stayed relatively high since. While the Fed does not directly set mortgage rates, mortgage lenders take cues from them, and mortgage rates climbed in tandem with the Fed’s long string of rate hikes.
As long as the economy continues to motor along, the new normal of higher rates is here to stay.
— Greg McBride, Bankrate Chief Financial Analyst
The Fed signaled in its December meeting that its war on inflation could end soon, but many predict that buyers will still be feeling the squeeze in 2024. “As long as the economy continues to motor along, the new normal of higher rates is here to stay,” says Greg McBride, CFA, chief financial analyst for Bankrate. “A sharp economic slowdown would bring mortgage rates materially lower — but be careful what you wish for.”
Key housing market stats
- The median home-sale price as of November 2023 was $387,600, up 4 percent from one year ago, according to NAR data.
- The nation had a 3.5-month supply of housing inventory as of November, per NAR, which is low enough to be considered a seller’s market.
- Home-price growth rose by 3.9 percent in September 2023, marking the eighth consecutive month of increases, according to S&P CoreLogic’s latest Case-Shiller Index.
- Bankrate’s latest national survey of large lenders shows the average rate on a 30-year mortgage was 6.88 percent as of December 20, 2023.
- The U.S. inflation rate as of November 2023 was 3.1 percent — still a bit higher than the Fed’s stated goal of 2 percent.
Will housing sales decline?
While home prices have more than held firm this year, the volume of home sales has softened considerably. Existing-home sales declined for five months in a row before rising slightly in November…
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