Low levels of inventory continue to give sellers the upper hand in the housing market. High mortgage rates and steep home prices are dissuading potential buyers.

In September 2023, the median sale price for an existing home in the U.S. reached a hefty $394,300, marking the third consecutive month of year-over-year price increases. The average 30-year mortgage rate stood at 7.69 percent in early November.

Home prices, mortgage rates, and inventory levels are crucial factors shaping housing market in the coming year.

2024 Mortgage Rate Predictions

Experts predict that the new normal of higher rates will persist as long as the economy remains robust. A sharp economic slowdown could bring mortgage rates lower, but it might have modest effects on home price appreciation.

Key Housing Market Stats

• The median home-sale price as of September 2023 was $394,300, up 2.8 percent from one year ago (NAR data).
• The nation had a 3.4-month supply of housing inventory as of September, considered a seller’s market (NAR).
• Home-price growth rose by 2.6 percent in August 2023, the seventh consecutive month of increases (S&P CoreLogic’s Case-Shiller Index).
• The average rate on a 30-year mortgage was 7.69 percent as of November 8, 2023 (Bankrate).

Will Housing Sales Decline?

While home prices have held firm, the volume of home sales declined in September 2023. Predictions suggest that retreating mortgage rates in 2024 could stimulate both buyers and sellers, potentially increasing sales by up to 15 percent.

Will Housing Inventory Increase?

Housing supply has been low, with existing homes on the market declining by 8.1 percent since last year. Some experts foresee a slight increase in housing inventory for 2024, driven by more construction and existing homeowners willing to sell.

Will Home Prices Go Down?

While home prices have reached historic highs, predictions suggest a modest rise of 3 to 4 percent in 2024. Limited inventory and seller reluctance to give up low-interest rates may prevent significant price drops.

2024: Buyer’s or Seller’s Market?

The current shortage of inventory suggests that it’s challenging to shift to a buyer’s market. With expectations about interest rates and supply, demand is likely to exceed supply, maintaining conditions similar to the current seller’s market.

Bottom Line on the 2024 Housing Market

The combination of high mortgage rates, steep home prices, and low inventory levels poses challenges for both buyers and sellers in the 2024 housing market. If rates cool as predicted, market activity may pick up. Relying on the guidance of an experienced local real estate agent is crucial in navigating these complex conditions.