As an expert in the real estate field, I can confidently say that the future of house prices in 2024 looks bright. Despite the mixed signals from recent economic data, the market is expected to remain strong and prices are likely to keep increasing. Job growth and the unemployment rate in July were better than expected, and the bidding war is fading away as competition decreases and more sellers lower their prices. This gives buyers more room for maneuver and should bring demand back to the market, pushing up prices. Low inventory and cumulative demand will continue to drive this market, and home sales are expected to stay lower than in recent years, at least in the near future.
The strong real estate forecast for the next 5 years is due to expectations that strict market conditions will persist, with demand for housing exceeding the supply of available housing. The age distribution of buyers is a kind of midpoint as far as the United States is concerned. Buyers are 43, while the average slows upwards (45 years). Nearly one in five shoppers (17%) is in their 20s or younger, while approximately a quarter (23%) are sixty years of age or older. Despite declining buyer optimism that now is a good time to buy a home, the number of households interested in becoming homeowners remains high. This is especially true for younger homebuyers, who are likely to buy for the first time and are struggling to save for a down payment, as rents continue to reach record levels.
At the same time, sellers' expectations for higher down payments appear to be rising, driven by a housing market that remains competitive and by repeat buyers with relatively more capital available. Rising mortgage rates may reduce some of the market momentum and allow inventory to rise slightly. It would also reduce the rate of appreciation of home prices and reduce the likelihood of a red-hot housing market leading to an overheated market. Despite this, the supply of available housing is so low that even a significant drop in demand due to rising interest rates will not turn it into a housing market for buyers. Because there aren't enough homes available to meet demand, home prices will continue to rise, but the combination of rising home prices and high mortgage rates means that fewer people will be able to buy. There would continue to be continued price appreciation, inventory shortages and good demand.
Some markets will experience lower appreciation rates than others, and the Sunbelt will perform particularly well. Home prices don't seem to be falling, even in some of the country's most expensive markets, the first-tier markets. For example, according to CoreLogic, these large cities continued to see price increases in February, with Phoenix leading the way, with 30.4% year-on-year. Las Vegas ranked second, with year-on-year price growth of 26.5%, followed by San Diego (25.2%).When a housing bubble grows and pressure increases, the housing market is likely to crash if several factors come into play. The previous bubble came after a period in which lenders were more lax when it came to granting loans and more people turned to the housing market as an investment instead of buying a house to live in. In conclusion, I believe that house prices in 2024 will remain strong due to low inventory levels and high demand.
Rising mortgage rates may reduce some of this momentum but will not turn it into a buyer's market. Prices are likely to continue rising but at a slower rate than before due to higher mortgage rates.
