01/11/2024
2024 vs 2023 year in review:
If 2023 saw homebuyers and sellers mostly treading water against waves of rising interest rates, 2024 has them preparing to swim into calmer waters.
What happened?
Inventory rose but was still low. After stalling in the first quarter of 2023, the inventory of homes for sale continued an upward trajectory. November’s inventory was about two-thirds of November 2019’s level.
Rates climbed to multi-decade highs. Pressured by Fed policy rate hikes and high inflation, mortgage rates continued their ascent. They reached their highest point in October.
Price growth slowed. The inventory shortage pushed prices higher, though at a slower pace than in 2022. Homeowners continued to benefit from the market with increases in equity.
What’s ahead in 2024?
If there’s one thing we’ve learned from the last several years, it’s that predictions are fallible. Here’s what we can say with confidence.
Rates will likely fall. As inflation cools, the Fed has indicated it will cut policy rates, which influence mortgage rates.
Lower rates could lead to an uptick in price gains. Lower rates and improved affordability typically bring more buyers to the market. If potential home sellers stay out of the market, inventory shortages could bring back bidding wars, and prices could start rising faster.
Are you waiting for rates to fall before making a move?
Waiting too long could mean that price increases will offset the advantage of lower rates. Those who purchase now may gain the advantage of a better price with the ability to refinance later if rates drop.
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