on February 26, 2024
2024 Home Price Forecasts Surge: What Sellers Need to Know
Over the past few months, experts have amended their 2024 home price forecasts based on the latest data and market signals. They are saying they are even more confident prices will rise, not fall.
So, let’s see exactly how experts’ thinking has shifted – and what’s caused the change.
2024 Home Price Forecasts: Then and Now
In the chart below you will see what seven expert organizations think will happen to home prices in 2024. It compares their first 2024 home price forecasts (made at the end of 2023) along with their newest updated projections:
The original forecasts show that, at first, the experts thought home prices would only rise a little this year. But looking at the column on the right, you’ll see they’ve ALL updated their forecasts and now think prices will go up more than they originally forecasted. And as you can see, some of the differences are major.
Two big factors are keeping strong upward pressure on home prices. The first is how few homes are for sale right now. According to Business Insider:
“Low home inventory is a chronic problem in the US. This has generally kept home prices up . . .”
A lack of housing inventory has been pushing prices up for a long time now – and that’s not expected to change dramatically this year. But what has been the change, is mortgage rates.
Late last year when most housing market experts were calling for home prices to rise only a little bit in 2024, mortgage rates were up and buyer demand was more moderate.
Now that rates have come down about a percentage point from their peak last October, and with further declines expected over the course of this year, buyer demand is beginning to pick up. This increase in demand, along with an ongoing lack of inventory, is what is causing the experts to feel the upward pressure on prices being stronger than they expected a couple months ago.
A Look Forward To Get Ahead of the Next Forecast Revisions
It is common for real estate experts to regularly revise their home price forecasts as the housing market shifts. This part of their job ensures their projections are always up-to-date and factor in the latest changes in the housing market.
That means they’ll continue to revise their projections as the housing market changes this year, just as they’ve always done. How those forecasts change next is anyone’s guess, but they key, is to pay attention to mortgage rates.
If rates trend down this year, as they’re expected to do, it could lead to more buyer demand and even higher home price forecasts.
Basically, it’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to go up, too.
Bottom Line
At first, experts believed home prices would only go up a little this year. But now, they’ve changed their minds and forecast prices will grow even more than they originally thought. As you consider your plans for the upcoming year, it’s worth noting these recent adjustments in the home price forecasts. Understanding these shifts can be crucial if you’re thinking about selling your home. If you have been thinking about going on the market in the next year, let’s have coffee. We can discuss how these market dynamics may impact your decision and ensure you’re prepared for the local changing landscape.