You’re ready to sell your house. That’s great!
Part of the due diligence you must do is research real estate market trends. The housing market is in flux. Home prices are coming down from historic highs during the pandemic, affecting home sales. The Fed’s policy of increasing Interest rates is affecting homebuyers.
Higher mortgage rates make home affordability a thorny issue for some first-time borrowers. The year-over-year rate of new home sales has increased in some portions of the country while decreasing in others.
We’re here to help you navigate the real estate market. We’ll discuss significant market trends and provide you with housing market predictions that offer you the information you need to list your home. Keep reading for our 2023-2024 housing market forecast!
House Market Trends 2023-2024
The housing market is the economic sector that buys and sells homes. It includes all aspects of the home-buying process, from searching for a home to closing on a sale. The housing market is closely linked to the economy as a whole, as it can indicate economic health.
The housing market in 2023-2024 will be slower than usual, with home prices slowly declining. According to the National Association of Realtors (NAR), home values will increase by 1.2% this year but stabilize in the middle of 2023.
The U.S. Housing Market Indicators report highlights key statistics and trends in the housing market, such as a 3.3% decrease from last year in home prices and a 5.8% increase in homes for sale nationwide in March of 2023.
House Market Inventory 2023
Housing market inventory refers to the number of homes available for sale in a given market. The inventory includes:
- Single-family homes
- Condos
- Townhomes
- Other types of residential properties.
Inventory levels do not include commercial real estate properties and can vary significantly from one area to another. They can also change over time.
Low inventory levels increase prices as buyers compete for limited housing options. High inventory levels indicate more supply than demand in the housing market, which can lead to lower house prices and slower sales due to low housing affordability.
The nationwide house market inventory is currently at a low level. According to the National Association of Realtors (NAR), the number of existing homes for sale in March 2023 was 1.03 million, 6.6% lower than last year and the lowest since 1999.
This low inventory results from a combination of factors, including rising mortgage interest rates, declining home sales, and ongoing affordability issues.
The median days on the market for housing inventory across the United States was 58 days, according to the Federal Reserve Bank of St. Louis. The days on the market indicate that homes are selling quickly due to high demand and low supply.
The nationwide housing inventory will remain tight in 2023 as buyers struggle to find affordable homes due to high-interest rates and increased sales prices.
How the Current Economic Outlook is Impacting Home Sales
The economic outlook is a forecast of the future performance of an economy. The results come from financial data, such as GDP growth, unemployment rates, inflation levels, and other indicators.
It can provide insight into how an economy may perform and be used to make decisions about investments and other financial matters.
The current economic outlook in the U.S. for 2023 is one of slow growth and high inflation.
- According to the Conference Board, real GDP growth will slow to 0.7 percent in 2023, while the Consumer Price Index (CPI) inflation rate may reach 4.5%.
- Deloitte Insights predicts that CPI inflation will fall below 3% by 2024
- The OECD forecasts that real GDP will grow by 1.8% in 2022, 0.5% in 2023, and 1.0% in 2024.
The Fed
The Federal Reserve (Fed) is the central bank of the United States. It helps manage the economy by setting interest rates and controlling how much money is circulating.
When it comes to determining the economic outlook, the Fed looks at a variety of factors. They look at employment numbers, inflation, consumer spending, and other economic indicators. They also take into account global events that could affect the U.S. economy.
The Fed’s outlook for the U.S. economy in 2023 and beyond appears cautiously optimistic, but risks could still lead to a deep recession if not appropriately managed. Households and businesses alike need to be aware of these risks and take steps to avoid them where possible.
Current Economic Impact On Home Sales
The United States 2023 economic outlook will significantly impact home sales. With high-interest rates and a recession looming, the housing market will be challenging in 2023.
According to experts, new and existing home sales volumes are expected to drop after significant drops in 2022. Additionally, the median U.S. home-sale price is forecasted to decline in 2023 compared to 2022.
These predictions suggest buyers may find more affordable homes in 2023, but they should also be aware of potential risks associated with the current economic climate.
Inflation Impact on Real Estate Market
Inflation is an increase in the price of goods and services. It’s an annual percentage increase. When inflation occurs, every dollar you own buys a smaller percentage of a good or service than before.
The following are key points to understand about inflation:
- Reduces the purchasing power of money, meaning that each currency unit buys fewer goods and services over time
- Caused by an increase in demand, production costs, or both
- Typically measured using the Consumer Price Index (CPI)
- Positive and negative effects on an economy
Inflation has had a noticeable effect on the U.S. real estate market nationally. The rise is due to rising interest rates, which have pushed mortgage rates higher and made homes less affordable.
Freddie Mac, a government-sponsored enterprise that provides liquidity to the U.S. mortgage market, has recently reported that inflation remains well above the desired level but is showing signs of deceleration. Inflation has caused mortgage rates to increase, with the average rate for a 30-year fixed-rate mortgage now at 6.73%.
Inflation has had a significant effect on the U.S. real estate market nationally. Home prices have risen steadily over the past few years but are now beginning to slow down as interest rates continue to climb and make homes less affordable for buyers.
Mortgage Rate Increases Forecasts 2023-2024
Mortgage rate forecasts for 2023-2024 predict an increase from current levels. According to the Fed, they expect mortgage rates to rise gradually over the next two years. The average 30-year fixed mortgage rate is currently 6.96% and will reach 7.2% by the end of 2023 and 7.4% by the end of 2024.
It’s important to note that these predictions are subject to change depending on economic conditions and other factors. So potential home buyers must stay current with current mortgage rate trends before deciding about their home purchase or refinance plans.
House Market Trends for 2024 Onwards
The housing market in 2024 and beyond is difficult to predict, but a few trends could shape the market. Home prices will rise in many areas of the country in the short term due to low inventory and high demand. This trend will likely continue as interest rates remain low and the economy remains strong.
In the longer term, however, rising median home prices could eventually lead to a housing market crash. If this happens, we could see a significant drop in home prices and a decrease in home sales.
Technological advances such as automation and artificial intelligence could also impact the housing market in the future.
It’s impossible to know what will happen with the housing market in 2024 and beyond. Still, potential buyers and sellers must stay informed about current trends to make informed investment decisions about new listings.
Conclusion
The housing market in the United States should remain strong in 2023 and 2024, with prices continuing to rise. The demand for affordable housing and a shift towards suburban and rural areas are increasing. Metro areas are seeing less of an increase.
The economy has a major effect on the housing market, with rising interest rates making it more difficult for buyers to afford homes. Additionally, rising unemployment can lead to decreased demand for housing and lower home values. Despite these factors, the U.S. real estate market should remain competitive due to low inventory levels and continued demand from buyers.
The U.S. housing market looks positive for 2023-2024, with prices rising despite economic challenges. With low inventory levels due to fewer homebuilders committing to new construction, there may be an increase in existing homes’ price growth.
Selling to a cash buyer can be an attractive option for homeowners who want to avoid the hassle of researching the housing market. With a cash buyer, you don’t need to worry about our buyer getting pre-approved for a mortgage or dealing with the higher interest rates
You don’t have to worry about appraisals, inspections, or other contingencies with traditional home sales. Instead, you can accept an offer and close the deal quickly and easily. The process makes getting a fair price for your home easier without spending time and money on marketing and negotiating with a real estate agent.
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