FOR RELEASE C.A.R. releases its 2024 California Housing Market ForecastCalifornia housing market will rebound in 2024 as mortgage rates ebb. LOS ANGELES (Sept. 20) – Slower economic growth and cooling inflation will bring down mortgage interest rates in 2024 and create a more favorable market environment to spur California home sales next year, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). The baseline scenario of C.A.R.’s “2024 California Housing Market Forecast” sees an increase in existing single-family home sales of 22.9 percent next year to reach 327,100 units, up from the projected 2023 sales figure of 266,200. The 2023 figure is 22.2 percent lower compared with the pace of 342,000 homes sold in 2022. The California median home price is forecast to rise 6.2 percent to $860,300 in 2024, following a projected 1.5 percent dip to $810,000 in 2023 from $822,300 in 2022. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year. “2024 will be a better year for the California housing market for both buyers and sellers as mortgage interest rates are expected to decline next year,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “A more favorable market environment with lower borrowing costs, coupled with an increase in available homes for sale, will motivate buyers and sellers to reenter the market next year. First-time buyers who were squeezed out by the highly competitive market in the last couple of years will try to attain their American dream next year. Repeat buyers who have overcome the “lock-in effect” will also return to the market as mortgage rates begin to trend down.” C.A.R.’s 2024 forecast predicts the U.S. gross domestic product to edge up 0.7 percent in 2024, after a projected uptick of 1.7 percent in 2023. With California’s 2024 nonfarm job growth rate at 0.5 percent, up from a projected increase of 1.4 percent in 2023, the state’s unemployment rate will increase to 5.0 percent in 2024 from 2023’s projected rate of 4.6 percent. Inflation will continue its gradual decline over the next 18 months, with the CPI registering 2.6% in 2024, down from 3.9% in 2023. As such, the average 30-year, fixed mortgage interest rate will decline from 6.7 percent in 2023 but remain elevated at 6.0 percent in 2024. While next year’s projected average for the 30-year fixed mortgage interest rate will still be higher than the levels observed in the few years prior to the pandemic, it will be lower than the long-run average of nearly 8% in the past 50 years. Housing supply in 2024 will remain below the norm despite a projected increase in active listings of between 10 percent to 20 percent, as market conditions and the lending environment continue to improve. “With the economy expected to soften in 2024, the Federal Reserve Bank will begin loosening its monetary policy next year. Mortgage rates will trend down throughout 2024, and the average 30-year fixed rate mortgage could reach the mid-5% range by the end of next year,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “Buyers will have more financial flexibility to purchase homes at higher prices, which could generate increased housing demand and result in more upward pressure on home prices. 2024 CALIFORNIA HOUSING FORECAST 2017 2018 2019 2020 2021 2022 2023p 2024f SFH Resales (000s) 424.9 402.6 398 411.9 444.5 342 266.2 327.1 % Change 1.7% -5.2% -1.2% 3.5% 7.9% -23.1% -22.2% 22.9% Median Price ($000s) $537.9 $569.5 $592.4 $659.4 $786.8 $822.3 $810.0 $860.3 % Change 7.1% 5.9% 4.0% 11.3% 19.3% 4.5% -1.5% 6.2% Housing Affordability Index* 29% 28% 31% 32% 26% 19% 17% 17% 30-Yr FRM 4.0% 4.5% 3.9% 3.1% 3.0% 5.3% 6.7% 6.0% p = projected * = % of households who can afford median-priced home # # #
September 20, 2023
f = forecast
Leading the way ...® in real estate news and information for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
FAQs
What is the housing market prediction for 2024 in California? ›
The revised California median home price forecast is for a rise 0f 6.2% to $860,300 in 2024, a -1.5% drop this year to $810,000 from $822,300 in 2022.
Will 2024 be a better time to buy a house? ›Yes. This is the best time to buy a house in California. With the current trend in the CA housing market, you'll find better deals on your dream home during Q2 2024. As per Fannie Mae, mortgage rates may drop more in Q2 of 2024 due to economic changes, inflation, and central bank policy adjustments.
Should I sell my house now or wait until 2024? ›Best Time to Sell Your House for a Higher Price
April, June, and July are the best months to sell your house in California. The median sale price of houses in June 2023, was $796,400, which is expected to grow more in 2024. However, cities like Arcadia and San Mateo follow an upward trend throughout the year.
Despite a modest fall during the so-called correction of late summer 2022 and spring 2023, home prices in California are now almost as high as they were during their peak in July 2022, when they reached an average of $769,345.
Is 2024 a good year to buy a house in California? ›Housing affordability (the percentage of households that can afford a median-priced home) is expected to remain at 17% next year, the same as in 2023. They predict that California's median home price will rise roughly 6% in 2024, climbing to around $860,300 by year's end.
Will housing interest rates go down in 2024? ›Mortgage rate predictions 2024
NAR believes rates will average 7.1% this quarter and fall to 6.5% by the end of 2024. While there's some dispute on exactly how much rates will decrease, the general consensus is that mortgage rates will go down later in 2024 and end up in the mid-to-low 6% range.
Experts like Fannie Mae and the Mortgage Bankers Association predict that mortgage rates will decrease in 2024 and continue to drop in 2025 but this likely won't be until the latter half of the year.
What will mortgage rates be in 2024? ›That means the mortgage rates will likely be in the 6% to 7% range for most of the year.” Mortgage Bankers Association (MBA). MBA's baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
Will 2026 be a good year to buy a house? ›However, increases should slow between 2024 and 2026, and rates may even decline in 2027. Among the factors that could impact mortgage rates in the next 5 years are inflation, Federal Reserve policy, and economic growth. Homebuyers should consider locking in a low mortgage rate now, as rates are expected to rise soon.”
Is it a buyers or sellers market in 2024 in the USA? ›The median home-sale price as of February 2024 was $384,500, up 5.7 percent from one year ago, according to NAR data. The nation had a 2.9-month supply of housing inventory as of February, per NAR, which is low enough to be considered a seller's market.
Is spring 2024 a good time to sell? ›
Home sellers who are hoping to sell this year and looking for the perfect time to list should start getting ready—because the best time to list a home in 2024 is approaching quickly.
Will there be bidding wars in 2024? ›According to Yahoo Finance, bidding wars are still very much a thing in 2024, with some houses receiving upwards of 30 offers. So it's completely understandable if you're starting to wonder if bidding wars are the new normal, and are just something buyers will have to deal with forever at this point.
Will California rent ever go down? ›Rental prices were down 2.5% in Los Angeles County in February 2024 versus the same month a year before, according to data from Apartment List. Experts attribute the decline to a possible softening of demand amid population loss due to a recent exodus from parts of Southern California.
Is it a good time to buy a house in California? ›To decide whether it's worth buying a house in California right now, you need to consider what steps are necessary for the purchase. Prices in some regions are currently lower than they have been since the start of the pandemic, so now could be a good time to enter the market.
Is California having a housing crisis? ›To put it another way, between 2010 and 2020, California's population grew by 6.1% while its housing supply rose by just 4.7%, increasing the already wide gap. Moreover, since 2020 the state has fallen about 50% short of the 180,000 new units the state says are needed each year.
What is the market forecast for 2024? ›The market sees a greater than 80% chance of at least five rate cuts from current levels by the end of 2024. Investor optimism about the economic outlook has improved dramatically from a year ago, but there's still a risk that Fed policy tightening could tip the economy into a recession in 2024.
What is the stock market prediction for 2024? ›Wall Street analysts' consensus estimates predict 3.6% earnings growth and 3.5% revenue growth for S&P 500 companies in the first quarter. Analysts project full-year S&P 500 earnings growth of 11.0% in 2024, but analysts are more optimistic about some market sectors than others.
Is California a buyer's market? ›Over 34 years, buyer's market conditions are found 33% of the time. It's been 12 years since California housing has been in “buyer's market” conditions. Industry folklore infers that buyers are in control of the market when house hunters can pick from listing inventory that equals six months or more of sales.
Will home prices drop in San Diego in 2024? ›In 2024, San Diego's housing market is predicted to see an 11.0% increase in home sales and a 5.4% rise in median sales prices, signaling a thriving market.