Navigating the Housing Market in 2024: What You Need to Know

If you're thinking of making a move this year, two housing market factors are likely on your mind: home prices and mortgage rates. You're probably wondering what will happen next and whether it's better to move now or wait it out. The best decision you can make is based on the latest information available. Here's what experts are saying about both prices and rates.

1. What’s Next for Home Prices?

A reliable source for home price forecasts is the Home Price Expectations Survey from Fannie Mae, which surveys over one hundred economists, real estate experts, and investment and market strategists. According to the most recent release, experts project that home prices will continue to rise at least through 2028. While the percent of appreciation varies year-to-year, the survey indicates we will see prices rise (not fall) for at least the next five years, at a much more normal pace.

What does this mean for your move? If you buy now, your home will likely grow in value, and you should gain equity in the years ahead. However, if you wait and prices continue to climb, the cost of a home will only be higher later on.

2. When Will Mortgage Rates Come Down?

This is the million-dollar question in the industry. There’s no easy way to answer it because several factors contribute to the volatile mortgage rate environment we're in. Odeta Kushi, Deputy Chief Economist at First American, explains:

“Every month brings a new set of inflation and labor data that can influence the direction of mortgage rates. Ongoing inflation deceleration, a slowing economy, and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.”

What happens next will depend on where each of those factors goes from here. Experts are optimistic that rates should come down later this year, but acknowledge that changing economic indicators will continue to impact rates. As a CNET article states:

“Though mortgage rates could still go down later in the year, housing market predictions change regularly in response to economic data, geopolitical events, and more.”

The Current Housing Market Landscape

In May 2024, home prices in California were up 9.6% compared to last year, selling for a median price of $858,900. The number of homes sold was 26,871, showing a slight increase of 0.8% year-over-year. The median days on market remained steady at 26 days.

How Competitive Is the Market?

In May 2024, 49.8% of homes in California sold above list price, up 0.8 points from last year. However, 25.6% of homes experienced price drops, up from 20.0% in May of the previous year. The sale-to-list price ratio was 101.4%, an increase of 0.4 points year-over-year.

Bottom Line

If you’re ready, willing, and able to afford a home right now, it's crucial to partner with a trusted real estate advisor to weigh your options and decide what’s right for you. Connect with a knowledgeable real estate agent to ensure you have the latest information on home prices and mortgage rate expectations. Together, you'll review what the experts are saying so you can make an informed decision about your move.

Navigating the housing market can be complex, but with the right guidance and up-to-date information, you can make the best decision for your future.