Update to 2024 Housing Predictions

Update to 2024 Housing Predictions.  If you read my blog 2 weeks ago, “Housing Predictions for 2024“, then you know I promised to update after the opportunity to hear Barry Habib speak.  Following are the key takeaways.

Interest Rates:  There is a reasonable chance of a rate decrease at the March 20th Fed meeting.  High probability of a rate decreases at both the May 1 and June 12 meeting.  Expect rates to be between mid-5’s and high 6’s for 2024.  Expect some additional decreases in 2025 and 2026.  Don’t expect rates to return to the 3’s.

Housing Prices:  Home appreciation is forecast to increase 4.5% – 5.00% and transaction volume is expected to rise 15% – 20%. The main driver of this is inventory.  There are far more households being formed than there are homes being built. This is why the real estate market has been so strong and why we are seeing prices increase in conjunction with the lack of inventory.  Expect 2024 to be no different.

So, what does this all mean?  Buy now.  Prices are only going to go up.  As rates go down more buyers enter the market.  Typically, a 1% decrease in interest rates results in 5 million more buyers entering the market.  Buy before prices go up and why you have less competition.  Spring typically brings more homes for sale.  However, it also brings more buyers to compete with.

In making updates to my 2024 Housing Predictions, I was pretty much on the money.   I have a few more details after the meeting, but my forecast certainly jives with Barry’s.