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2024 | Forecasts for Market Improvements

Forecasts reveal 2024 market improvements

Better times may be ahead in the real estate market during 2024, in a year that promises to see the end of rising mortgage costs and the start of a journey to a more normalized market.

Although, given it’s an election year, some uncertainty will remain.

All the talk is expected to continue to revolve around mortgage costs.

If the rates come down from mid-2024, as widely predicted, more sellers will enter the market, easing the current shortage of homes for sale.

Unfortunately there is no common agreement between the experts on what property prices are likely to do.

Morgan Stanley forecasts a 2% drop in prices while the National Association of Realtors is at the bullish end with a plus 3% to 4% prediction.

Buyer affordability is another hot button. If the Federal Reserve starts dropping the cash rate, we’ll begin to see owners upgrade and first-time buyers push forward with plans they abandoned several months ago.

But it will take a while to return to the super-low loans enjoyed in 2020-21 and it’s possible they won’t go that low in this cycle.

Much has been written about the shortage of homes on the market and America is not alone in having insufficient housing to meet demand.

But the good news is that inventory is predicted to rise 7%, and there is likely to be more than a million new home starts in 2024. This will help stabilize prices.

The rental crisis across many cities is another element of the housing challenge. This factor has been pushing up rents for more than a year.

Consequently, investors are returning to the market, expecting to capitalize on a falling cash rate through 2025 and 2026. JVMLending forecasts investment levels will rise 15% this year.