Get ready for a shift in the housing market’s “lock-out dilemma” as we move into 2024. This is what’s been happening: many homeowners who snagged those ultra-low mortgage rates during the pandemic are now sticking to their nests. They’re not too keen on trading up if it means a steeper mortgage in the current rate environment. This trend has put the brakes on the usual number of homes popping up for sale.
Just look at the numbers from November 2023, where we noticed about 316,990 new homes on the market, a notable decrease from the 377,450 back in November 2021. But as we edge closer to 2024, there’s a buzz among real estate pros that we might see this trend start to reverse. If mortgage rates mellow out to around 6%, it could be just the nudge needed for potential sellers to dive into the market.
And get this: new listings in late 2023 saw a slight increase from the prior year, which has got some folks thinking that the market has hit a turning point.
So, what’s the forecast for 2024? If mortgage rates continue to decline, the housing market could have brighter days ahead. This could spell a gradual uptick in fresh listings and a livelier pace for home sales.
As spring 2024 approaches — typically the housing market’s prime time — there’s a cautious optimism in the air. With a gentle dip in mortgage rates on the cards, it could lure buyers and sellers out of the woodwork. Despite tighter wallets and a leaner lineup of available homes, there’s a whole bunch of millennials on the cusp of homeownership who might just make their move.
When it comes to making homes more affordable, the likely route seems to be through a mix of dropping mortgage rates, growing household incomes, and a cooling off in home price hikes.
Broaden the lens a bit, and you’ll see long-term demographic shifts at play. Millennials, the largest generation yet, are hitting their prime home-buying years and show no signs of slowing down. Meanwhile, older generations are enjoying their homes longer, which ups the ante for housing demand. But this change is more of a slow burn than a wildfire. As we project out over the next decade, we might see a shift as boomers start to transition out of their larger homes, potentially easing up the tight squeeze on the housing market we’ve been feeling.
In the grand scheme, the housing market could be on the cusp of a significant transformation, with demographic trends and market forces converging to reshape the landscape of homeownership.
Simpson Realty Group
Mike and Anabel Simpson
602-816-4126 (Hablo Español)