real estate housing crisis

Real Estate Housing Trends April 2024

April 22, 2024

The real estate housing market is a dynamic arena, influenced by a multitude of factors. Let’s delve into the current state of housing and explore contrasting viewpoints from experts and speculators.

While mortgage rates have risen since 2020, experts anticipate gradual declines in 2024, assuming the Federal Reserve acts on its signaled interest rate cuts. However, affordability remains a challenge for many homebuyers in today’s competitive market. 

Mortgage Rate Experts Forecast

Mortgage Rates

Mortgage rates have stayed below 7% so far in 2024, but not low enough to encourage potential buyers or homeowners to refinance. For the week ending April 4, the average 30-year fixed mortgage rate stood at 6.82%

It’s crucial to address the reality as Experts predict varying scenarios for mortgage rates in 2024:

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  • Freddie Mac: Forecasts mortgage rates to stay above 6.5% through this quarter and next.
  • Fannie Mae Housing Forecast: The 30-year mortgage rate will end in 2024 at 6.4%, up from 5.9% in the previous forecast.
  • National Association of Realtors chief economist Lawrence Yun: Expect rates in the 6% to 7% range for most of the year.
  • Mortgage Bankers Association (MBA): The baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025.
  • Bank of America head of retail lending Matt Vernon: Expects gradual rate reductions, possibly beginning in the latter part of the year.
  • Bright MLS chief economist Dr. Lisa Sturtevant: Predicts rates to hit 6.2% by the fourth quarter.
  • KPMG Economics senior economist Yelena Maleyev: Expects rates to stay below 7% as inflationary pressures ease and the path to Federal Reserve rate cuts remains clear 

Record Low Inventory

The supply of existing homes for sale has hit a historical low nationwide, fueling price competition. Total housing inventory fell to a record low of 910,100 units in December 2023, down 18% from the prior month and 14.2% from a year ago. It was the lowest amount in more than 20 years since data collection began

Barbara Corcoran talks about Housing

Elevated Mortgage Rates for Real Estate Housing

Experts predict that the real estate housing market will continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024. Doug Duncan, senior vice president and chief economist at Fannie Mae, emphasizes this challenge. He states, “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast.”

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Mortgage rates have stayed below 7% so far in 2024.

The Road Ahead

For a housing recovery to occur, several conditions must unfold. Keith Gumbinger, vice president at online mortgage company HSH.com, explains, “For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher. This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”

While the market dances to its own rhythm, buyers, sellers, and speculators must navigate this dynamic landscape with prudence. Real estate housing isn’t just about square footage and interest rates—it’s about dreams, aspirations, and the place we call home. 

Sources:

  1. Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
  2. Realtor.com Real Estate Data and Market Trends for Download

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