Real Estate Outlook 2024
By: Real Estate Hotline
Winter 2024 (Vol. 41, No. 4)
The National Association of Realtors (NAR) predicts 4.71 million existing-home sales in 2024, up 13.5% from the $4.1 million in 2023. With the median home price around $389,500, home prices are expected to stay pretty much the same at the national level in 2024, for the second straight year. If interest rates fall as projected and incomes increase, this may make homes more affordable for many buyers.
2024 is not expected to see dramatic rent increases and we may see some calming in the already high rent prices. This should be another historically low year for homeowner defaults, with less than 1 percent of mortgages expected to end in foreclosure, Texas remains a top Real Estate market for 2024. Metro areas with job growth and affordable housing are expected to see the most gains.
NAR Chief Economist Lawrence Yun expects the 30-year fixed mortgage rate to average 6.3% and that the Fed will cut rates four times – calming inflationary conditions – in response to slower economic activity. Yun also foresees 1.48 million housing starts in 2024, including 1.04 million single-family and 440,000 multifamily.
Top 10 Markets with Pent-up Housing Demand in 2024:
- 1. Austin-Round Rock-Georgetown, Texas
- 2. Dallas-Fort Worth-Arlington, Texas
- 3. Dayton-Kettering, Ohio
- 4. Durham-Chapel Hill, North Carolina
- 5. Harrisburg-Carlisle, Pennsylvania
- 6. Houston-The Woodlands-Sugar Land, Texas
- 7. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- 8. Philadelphia-Camden-Wilmington, Pennsylvania- New Jersey-Delaware-Maryland
- 9. Portland-South Portland, Maine
- 10. Washington-Arlington-Alexandria, D.C.-Virginia- Maryland-West Virginia
“The demand for housing will recover from falling mortgage rates and rising income,” Yun said. “In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years.
Q: With interest rates trending down, is it cheaper to buy than rent now?
A: In many areas, if you make a minimal down payment, the monthly housing cost of buying is around the same price (or even higher) than renting. However, buying still has its perks. You may be eligible for tax breaks, your monthly payment reduces your mortgage (not your landlords) and you don’t have to worry about lease renewals. If you are debating whether to buy or rent – do the math.
For example, in Florida, you can purchase a four bedroom, 2 bath home for $389,500. With a 5% down payment your loan amount would be $370,025. With a conventional 30-year fixed mortgage rate at 6.3% your monthly principal and interest would be $2290 per month. Add in property taxes ($405.65), private mortgage insurance (PMI $241) and homeowners’ insurance ($113.58) Your total monthly is $3,051. You can rent the same home for $3,200 so that’s pretty even.
However, if you bought this home with a 30% down payment and eliminated PMI, your total monthly payment is $2,208 and that would definitely be a better choice than renting.
If you are tired of renting, try visiting new builder sites. Many offer incentives such as rate buy downs and down payment assistance. It’s also a good idea to check out your state’s homeowner down payment assistance programs. Ask your lender to check out the down payment assistance programs through FreddieMac and HUD.