Housing Market Predictions for 2024 (2024)

Home Buying

Home Buying Basics

Real Estate Trends

9 Min Read | Feb 6, 2024

Housing Market Predictions for 2024 (1)

By Rachel Cruze

Reviewed by Albon Shaw

If you’re thinking about buying or selling a house right now and wondering about the real estate housing market, you’re not alone. The housing market has seen a lot of unusual trends in the past couple of years, so it makes sense you’d want the latest market update before you decide to buy or sell. The truth is, housing market predictions are about as reliable as weather forecasts. The real estate pros make their best predictions based on data, but no one can know what’s going to happen with 100% accuracy.

Still, even if you don’t know for sure, you can check out what the experts are saying and make some pretty good guesses. Just remember, you never want to let a market prediction control your housing decisions . . . only your personal situation and finances should do that!

With that said, here’s the real estate market forecast.

Key Takeaways

  • Interest rates should continue to decrease in 2024.
  • A housing market crash is not on the horizon.
  • Housing inventory will likely still be low in 2024.
  • If you’re financially ready to buy now, don’t wait.

Will Mortgage Rates Go Down in 2024?

Mortgage interest rates have been rising like crazy over the last few years, thanks to the Federal Reserve (also known as the Fed) repeatedly raising the federal funds rate. But will that trend finally start heading in the other direction in 2024? Yep! In fact, it already has.

Average interest rates across the U.S. for both 30-year and 15-year fixed-rate mortgages began steadily going down in November 2023, and that trend continued into January 2024.1Rates will likely keep going down throughout the rest of the year, especially since the Fed projected that it’ll lower the federal funds rate three times in 2024.2

So, what does that mean for the housing market? First, it means that buyer demand could increase in 2024 since more people will be able to afford a mortgage. It also means that, if you’re financially ready to buy a house, there’s no reason to wait around—since an increase in demand would also lead to an increase in home prices.

How do you know if you’re financially ready to buy? Let’s take a look.

Should I Buy a House in 2024?

You’reready to buy a housein 2024 if (and only if) you can check off these boxes:

  • You’re debt-free.
  • You have an emergency fund of 3–6 months of expenses.
  • Your monthly house payment will be 25% or less of your monthly take-home pay on a 15-year fixed-rate mortgage.
  • You have a down payment. A 20% down payment is ideal because you’ll avoid payingprivate mortgage insurance (PMI). But 5–10% is okay, too, if you’re a first-time home buyer. Just be prepared to pay PMI. And steer clear of FHA and VA loans—you’ll pay much more in fees with them.
  • You can pay the closing costs up front without stealing from your down payment.

If you don’t meet these qualifications, it doesn’t matter if the market is in your favor. Buying a home would end up being a curse instead of a blessing. Take your time toget in a better financial positionso you can buy a house the right way.

With the right agent, taking on the housing market can be easy.

Feel confident taking on the housing market with the right agent.

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Housing Market Recession: What Is It and Are We in One?

A housing market recession means the total number of home sales has been shrinking for at least six months in a row. So, has that been happening? Nope! In fact, home sales actually grew from May to June 2023, and again from July to August.3 That means the housing market is steady, even though sales saw a seasonal decline toward the end of the year.

Find expert agents to help you buy your home.

But even if home sales become unstable and start decreasing consistently in 2024, a housing recession isn’t really something to worry about—the prices will stay about the same.

You’d only worry about the market if the declining home sales were indicating too much supply (houses for sale) and not enough buyer demand. That would make home values plummet and hurt the overall economy. But that’s not what’s happening!

Forecast: Will the Housing Market Crash in 2024?

If you’re concerned about the housing market potentially crashing in 2024, you can put those worries to rest. Not only will prices not drop substantially in 2024, but prices are actually more likely to continue rising. The National Association of Realtors predicts that when August 2024 rolls around, existing home prices will be 2.6% higher than the year before.4 Freddie Mac expects a 0.8% bump during the same timeframe.5

To get a clearer picture of what to expect from the housing market in 2024, let’s go over the three factors that influence prices the most: inventory, buyer demand and interest rates.

What’s the Average House Price in 2024?

The average home price in the U.S. was $736,388 in December 2023 (including existing homes, new builds, single-family homes, condos and townhomes).But most experts report on the median, which was $410,000 in December 2023.6

Housing Market Predictions for 2024 (6)

Just so you know, the median price is right smack-dab in the middle of lowest to highest prices. It’s usually better to look at the median home price than the average. That’s because a small group of abnormally high- or low-priced houses can throw off the average and make regular homes seem more or less expensive than they really are. (Just something to keep in mind as you watch the average house price fluctuate in 2024.)

The main thing to know about this (and any) market is that home prices are determined by inventory and demand. Here’s a look at what you can expect in each of those areas.

Housing Inventory

Housing inventory simply refers to the number of houses for sale. When fewer houses are available, buyers are willing to pay more, and sellers have more leverage to increase their asking price. So, low inventory leads to higher home prices. It’s a big reason why buying a home has gotten so expensive recently.

When it comes to housing inventory for 2024, it looks like the number of houses on the market will still be low. For reference: The total housing inventory in December 2023 was 4.9% higher than the year before, but it was 4.7% lower than November 2023 and still a whopping 36% lower than pre-COVID levels.7

And even though plenty of new houses are being built, it’s not happening fast enough to make a major difference in overall housing inventory. In fact, the number permits issued for new builds was down 11.7% year-to-date in November 2023.8

Buyer Demand

Like we talked about earlier, buyer demand could sink in 2024, especially if the Federal Reserve continues to increasefederal interest rates. Today, buyer demand is still greater than housing supply. So home prices are likely to stay mostly the same in 2024, with some markets experiencing a small increase or a small decrease in dollar amount.

Housing Market Predictions for 2024 (7)

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Is Now a Good Time to Buy a House?

Here’s the thing: The market shouldn’t determine your decision to buy a house. If you’re prepared financially like we talked about earlier, then it’s a good time to buy a home—even if inventory is limited and interest rates are high. If you’re not financially prepared, it’s not a good time, even if there’s plenty of inventory and rates are down.

What the 2024 Housing Market Means for Buyers and Sellers

Is It a Buyer’s Market?

In a buyer’s market, there are more homes for sale than buyers. But since home supply is still low, it doesn’t look like there’ll be a buyer’s market anytime soon.

The good news is, the market isn’t as hot as it was in the past few years. If you’re looking to buy, you’ll have a few more options—and maybe less competition. Yes, prices are still high, but the frenzy is slowing down.

Is It a Seller’s Market?

A seller’s market is when demand for homes is higher than the supply of homes. And that’s still the case right now. If you’re planning to sell your house, you can expect to sell it fairly quickly for close to your asking price—as long as your asking price is realistic for the current market. (It’s easy to value your home based on memories and how much you loved living there, but a good agent will help you price it fairly.)

Will There Be a Lot of Foreclosures in 2024?

Foreclosures will likely rise throughout 2024, just as they did in 2023. For reference, the number of foreclosures in 2023 was 10% higher than the year before.9

Now, if you’re concerned about a repeat of the crazy number of foreclosures we saw back in 2010 on the heels of the Great Recession, here’s a stat that should give you some peace of mind: While foreclosure repossessions were up 10% in 2023 compared to 2022—that was still down 28% compared to 2019, and down 88% compared to the peak of foreclosures in 2010 caused by the Great Recession.10

Plus, most of the homes in foreclosure today probably won’t be repossessed by lenders like they were during the Great Recession. That’s because many of the borrowers in foreclosure today have positive equity (their homes are worth more than they owe), which they can use to avoid foreclosure by selling their house.11

Here’s what all this foreclosure stuff means for homeowners and home buyers:

  • Homeowners:Since the market isn’t going to get flooded with foreclosures, you can rest easy, knowing your home isn’t going to tank in value because of a sudden increase in home inventory.
  • Home buyers:If you’re waiting to find a great deal on a foreclosure, don’t hold your breath. This market is nothing like the Great Recession. And keep in mind,buying a foreclosed homecould come with its own set of potential issues. So, make sure you do your homework on the house and know what you’re getting yourself into before you buy.

How to Buy or Sell With Confidence in Any Housing Market

I know buying or selling a house may seem overwhelming, especially after all the wackiness we’ve seen in the market over the last few years, but you’ve got this!

Yes, the cost of buying a house is higher than it’s ever been before. And yes, selling a home in 2024 will come with obstacles—like higher-than-normal interest rates and high home values pricing out a lot of would-be buyers. But just because buying or selling may be more difficult now than it was a couple of years back, it is not impossible.

You still control your financial future. That includes real estate—no matter what’s going on in the market.

Next Steps

If you’ve decided that you’re ready to buy or sell after reading through these real estate market predictions and taking a close look at your personal financial situation, that’s exciting! But before you get too far along in the process, you need to hire an experienced real estate agent who can help you make the best decisions along the way.

I recommend working with an agent who’s part of our RamseyTrusted network. That’s because RamseyTrusted real estate pros are experts in their local areas, and our team has vetted each one to make sure they’re committed to serving you with excellence. They also have some important benchmarks on their resumés—things like several years of full-time experience and a high volume of closed deals.

Getting in touch with a RamseyTrusted agent is super easy and—best of all—it’s free!

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About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, host of The Rachel Cruze Show, and co-host of Smart Money Happy Hour. Rachel writes and speaks on personal finance, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches millions of weekly listeners with her personal finance advice. She’s appeared on Good Morning America and Fox News and been featured in TIME, REAL SIMPLE and Women’s Health, among others. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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Housing Market Predictions for 2024 (2024)

FAQs

Housing Market Predictions for 2024? ›

“Home prices are expected to rise roughly in line with consumer price inflation and wage growth over the next two years.” NAR predicts that median home prices will increase 1.8 percent over the course of 2024.

Will 2024 be a good year to buy a house? ›

Mortgage rates are expected to come down in 2024, and inventory and home sales are likely to increase. Homebuyers and sellers can also expect prices to continue to rise, albeit at a slower clip than the past couple of years.

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 the housing market going to recession in 2024? ›

Key Takeaways

The general consensus is that housing prices will not be dropping in 2024. The majority of forecasts indicate that house prices in the US are expected to rise or remain stable in 2024.

Should I sell 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.

Will house interest rates go down in 2024? ›

The good news: With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly. But that doesn't necessarily mean a return to the pre-pandemic era of more affordable mortgages and home prices.

Will 2024 be a good year for the market? ›

As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.

Will the housing market recover in 2025? ›

By 2025 through 2028, given the large run-up from 2021 through 2023, home prices are predicted to rise more gradually at about a percentage point above the rate of inflation, for an estimated increase of 13% to 14% from 2023 levels.

Should I sell now or wait until 2025? ›

While the current market favors sellers, indicating that a home sale now could yield a competitive sale price, waiting until next year might align better with forecasts predicting shifts in mortgage interest rates and the overall housing market.

Will houses be more expensive in 2030? ›

California recently ranked among the top three states where buying a house will be the most expensive by 2030, according to a new study. Data analysts at SmartSurvey found that houses in the Golden State are predicted to cost 20.4 times more than the average yearly income.

What is the hottest housing market in 2024? ›

The Spring 2024 Wall Street Journal/Realtor.com Housing Market Ranking
RankMetroPopulation
1Rockford, Ill.333,632
2Canton-Massillon, Ohio398,627
3Ann Arbor, Mich369,035
4Akron, Ohio697,935
16 more rows
Apr 25, 2024

Should I buy a house now or wait for a recession? ›

And as you might imagine, recessions are a risky time to buy a home. If you lose your job, for example, a lender will be much less likely to approve your loan application. Even if a recession doesn't affect you directly, if your area is hard-hit, that could have a serious effect on the local real estate market.

Will the economy boom in 2024? ›

Global GDP growth to slow in 2024

Global growth is forecast to slow to 2.5% in 2024, from 2.7% in 2023. We expect 2024 to be a pivotal year as consumption rebalances from services to goods and investment accelerates with easing monetary conditions.

Will 2024 be the best time to buy a house? ›

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.

Will prices increase in 2024? ›

Summary: The CPI and PCE increased 3.5% and 2.7%, respectively, year on year in March 2024. The PCE Index is projected to fall to 2.1% by fourth-quarter 2024, averaging 2.3% for the year. Supply chain improvements and falling housing prices have yet to be fully reflected in inflation numbers.

Is it smart to sell before the recession? ›

Should I sell my house now, before there's a recession? Recessions mean belt tightening and potential layoffs. If your area is hard-hit by job losses, the number of qualified buyers will be severely limited — if you're concerned, it might be best to sell before that (potentially) happens.

Is 2024 a good year to buy a car? ›

Experts say that 2024 will be the best year to purchase a new car since 2019. As interest rates slowly drop throughout the remainder of the year, payments will become more manageable. Don't overlook manufacturer rate promotions, as they can save you thousands of dollars.

What is the interest rate forecast for the next 5 years? ›

Trading Economics offers a more optimistic outlook, predicting a rise to 5% in 2023 before falling to 4.25% in 2024 and 3.25% in 2025. This forecast is supported by Morningstar's analysis, which projects rates between 3.75% and 4%.

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