2024 Housing Outlook: Trends and Predictions for Home Buyers and Investors

Buying a house is a huge milestone that feels like a rite of passage for many people. However, these days, many individuals are stuck worrying over whether homeownership is a financially smart choice, or if it ever will be. To put your mind at ease and give you a little perspective, here are some predictions on what future buyers might want to look out for in 2024 and beyond.

Low Inventory Is Here To Stay

One of the most prevalent trends we anticipate is a continuation of low inventory in houses available for new buyers. Newly built homes have seen an increase in price as well, making it less likely for a buyer to find one in their price range. Additionally, most current homeowners are fortunate to have already secured low-interest rates for the homes they own. In turn, this decreases the appeal for them to sell their homes and enter the market themselves, meaning there are fewer opportunities for new buyers to even find a property in the first place.

A Shift In Prime Housing Markets

Location is also an important factor to consider, as real estate activity will vary significantly from market to market. Certain cities like Denver, Colorado, and Austin, Texas were prime locations for house hunters at the height of the pandemic. Years later, those cities and many more have seen a decrease in interest from prospective buyers. Instead, the market looks to favor cities with lower cost of living, and thriving economies without too much crowding, such as Santa Barbara, California; Colombus, Ohio; and Indianapolis, Indiana. Each housing market varies when it comes to aspects such as job growth opportunities, family-oriented amenities, and other lifestyle facets, but these characteristics will also vary from person to person, so it’s important to do your research to ensure the location you’re searching can fit your needs.

A Potential Drop in Mortgage Rates

Fortunately, there are some positive predictions for potential buyers: overall mortgage rates might see a decrease. Realtor.com, Redfin, and Zillow project that 30-year rates will settle around 6.5% by the end of 2024, down from current elevated levels. The Mortgage Bankers Association has an even more optimistic forecast, predicting that 30- year rates could potentially fall to 6% by the end of the year. If those  projections pan out, lower mortgage rates could provide a small amount of relief in terms of overall affordability for prospective homebuyers who have stressed over the soaring borrowing costs throughout the past few years. So while affordability challenges likely will persist, the housing market forecasts point to potentially lower mortgage rates, although the extent of any drop in rates remains to be seen.

Supply vs. Demand

While the potential for lower mortgage rates in 2024 could provide some reassurance for homebuyers compared to 2023, it's a double-edged sword. Any amount of decline in mortgage rates is likely to trigger an increase in demand from buyers entering the market. As mentioned, with limited inventory, this surge in demand will likely lead to more competition among buyers.

Plan Ahead With Gulfside Mortgage

That being said, don’t be discouraged from your goal! Some well-thought-out planning and preparation will go a long way in the success of your homeownership journey. We make it our mission to walk you through the most practical options for your home-buying needs, and we have decades of experience as a testament. With Gulfside Mortgage services, you can rest assured that you’ll have the support and guidance to make that decision and secure the home of your dreams without breaking the bank.