The National Association of Realtors (NAR) has released their fifth annual year-end research report entitled Real Estate Forecast Summit: The Year Ahead, containing a number of predictions on the upcoming year based on available data, buyer/seller sentiments, and commentary from Lawrence Yun, the NAR’s Chief Economist.
First and foremost, the NAR is predicting that existing-home sales will rise 13.5% next year from the 4.1 million sales in 2023 (estimated) and increase to 4.71 million in 2024.
The NAR also names Austin, Texas as the “market to watch” for the year and further predicts that median home prices will increase a slight 0.9% year-over-year.
“Metro markets in southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region,” said NAR’s Chief Economist Lawrence Yun.
Yun expects rent prices to calm down further in 2024, which will hold down the consumer price index. He predicts foreclosure rates will stay at historically low levels in 2024, comprising less than 1% of all mortgages.
Yun forecasts that U.S. GDP will grow by 1.5%, avoiding a recession that has been widely predicted but not yet occurred, with net new job additions slowing to 1.7 million in 2024, compared to 2.7 million in 2023 and 4.8 million in 2022. After eclipsing 8% in late 2023, he expects the 30-year fixed mortgage rate to average 6.3% and that the Fed will cut rates four times over the course of the year—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.
NAR identified 10 real estate markets with the most pent-up housing demand, which it expects to outperform other metro areas in 2024. In order, the markets are as follows:
- Austin-Round Rock-Georgetown, Texas
- Dallas-Fort Worth-Arlington, Texas
- Dayton-Kettering, Ohio
- Durham-Chapel Hill, North Carolina
- Harrisburg-Carlisle, Pennsylvania
- Houston-The Woodlands-Sugar Land, Texas
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- Philadelphia-Camden-Wilmington, Pennsylvania, New Jersey, Delaware, Maryland
- Portland-South Portland, Maine
- 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. The selected top 10 U.S. markets will experience faster recovery in home sales.”
Click here to see the report, an accompanying video, in its entirety.
