If you’re thinking about buying or selling a house and wondering about the real estate housing market, you’re not the only one. 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 make any major decisions!
Here’s the thing: housing market predictions are about as reliable as weather forecasts. The real estate professionals make their best predictions based on data, but no one can know what’s going to happen with 100% accuracy.
Still, even though it’s uncertain, you can hear what the experts are saying and make some pretty good guesses. Just remember, never 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.
Will Interest Rates Go Down in 2024?
Mortgage interest rates rose like crazy from 2021 through most of 2023, thanks to the Federal Reserve (also known as the Fed) repeatedly raising the federal funds rate. But it seems those days are over.
Interest rates dropped dramatically during the week of August 2, 2024, when the average rate for a 30-year mortgage dropped to 6.47%, and the typical 15-year rate fell to 5.63%. Rates hadn’t been that low in over a year.1 Plus, the FED will likely cut the federal funds rate at its next meeting, which should lead to a further decrease in mortgage rates.2
For the housing market overall, this means buyer demand should pick up throughout the rest of 2024 because more people will be able to afford a mortgage. That uptick in demand will likely lead to a price increase.
Is Now a Good Time to Buy a House?
Like I said before, the market shouldn’t determine your decision to buy a house. If you’re prepared financially, 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.
You’re ready to buy a house in 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 paying private 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 be a curse instead of a blessing. Take your time to get in a better financial position so you can buy a house the right way.
What’s the Average House Price in 2024?
The average home sales price in the U.S. is $501,700, according to the most recent numbers. But most experts report on the median, which is $412,300.3
Find expert agents to help you buy your home.
Just so you know, the median price is right 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 super high- or low-priced houses can throw off the average and make regular homes seem more or less expensive than they really are. (Something to keep in mind as you watch the average house price fluctuate in 2024.)
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. Prices are not going to start drastically going down anytime soon.
Home prices have dropped in 2024, but not by much. Specifically, prices have only gone down by around 3% since the end of last year.4 Moving forward, though, that trend will likely reverse. That’s what the Federal Home Loan Mortgage Corporation expects—they’re projecting prices to grow from now through the start of 2025.5
The main thing to know about the current (and any) market is that home prices are determined by inventory and demand. Here’s 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, things are looking up! July 2024 marked the ninth straight month of inventory growth. Even better news: The number of homes on the market in July 2024 was 36.6% higher than a year earlier.6
Now, while inventory is increasing, it’s still nowhere close to pre-COVID levels.7 So, you shouldn’t get your hopes up about seeing any kind of major price adjustment. But this is still a great sign, because it means the market is getting healthier overall.
Buyer Demand
The best way to gauge demand in the real estate market is by how many homes sell for more than their listing price. In July 2024, that number was 33%.8
Overall, seasonal trends of buyer demand have stayed steady over the last two years. Since the middle of 2022, demand has increased during the summer and decreased during the winter. On average, demand in the real estate market hasn’t changed much in 2024.
Like we talked about earlier, though, demand should go up if interest rates continue to decrease.
What the 2024 Housing Market Means for Buyers and Sellers
Is It a Buyer’s Market?
In a buyer’s market, the number of homes for sale is more than the number of 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, which is still the case right now. If you’re planning to sell your house, you can expect to sell it pretty quickly and for close to your asking price—as long as your asking price is fair for the current market. (It’s easy to value your home based on happy memories and how much you loved living there, but a good agent will help you price it realistically.)
Will There Be a Lot of Foreclosures in 2024?
So far in 2024, foreclosures are slightly down. There were 177,431 foreclosures in the first half of 2024, which represented a 4.4% year-over-year decline. Compared to 2022, though, foreclosures in the first half of 2024 were up 7.8%.9
Here’s what that 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 home could 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 is a big deal, especially after all the craziness 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’s not impossible.
You still control your financial future. That includes real estate—no matter what’s going on in the market.
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