US Housing Market slumps in 2024 with Florida Leading
The current state of US housing market has experienced a significant slump in 2024, a trend that can be attributed to several key factors:
High Mortgage Rates
One of the main contributors to this slump is the high mortgage rates. These rates have climbed to their highest level in more than two decades, pushing homeownership out of reach for many Americans.
Rising Home Prices
Another factor is the rise in home prices. The median national home price for all of last year edged up just under 1% to a record high. This rise in prices has made the market less affordable for many potential buyers.
A stubbornly low level of homes for sale has also kept many would-be homebuyers and sellers on the sidelines. This lack of inventory has further contributed to the slowdown in sales.
Regulations and Vacancies
In some areas, the value of city buildings is sinking under the weight of high interest rates, crippling regulations, and large vacancies caused by work-from-home and pandemic downsizing.
These factors combined have led to the slowest sales environment since 1995. However, if mortgage rates continue to ease, as many economists expect, that should help boost demand heading into the spring homebuying season.
Recent Data for January 2024
More recent data for January 2024 shows that home prices nationwide, including distressed sales, increased year over year. The average 30-year fixed rate rose for the second straight week by a modest four basis points to 6.66%—more than one percentage point lower than the 7.79% peak of 2023—for the week ending January 11 2024.
In the first quarter, existing home sales will be on pace for 4.1 million total in 2024, up from an annual pace of 3.85 million in the fourth quarter of 2023. Sales will continue rising throughout the year; they’ll be on pace for a total of 4.5 million by the fourth quarter.
While home prices will likely remain elevated—and even increase in some markets—industry experts expect prices in certain areas of the country are bound to soften dramatically. Economists are also optimistic that the Federal Reserve is done with its rate-hiking campaign to lower inflation.
According to the latest data from CoreLogic, a leading provider of property insights and solutions, the US housing market continued to appreciate in November 2023, albeit at a slower pace than previous months. The CoreLogic Home Price Index (HPI) shows that home prices nationwide, including distressed sales, rose by 5.2% year over year in November 2023, compared to 5.4% in October 2023. On a month over month basis, home prices increased by 0.2% in November 2023, compared to 0.4% in October 2023.
The CoreLogic HPI is based on public records data and incorporates the newly released data to ensure accuracy and timeliness. The HPI covers 6,700 ZIP codes, 620 Core Based Statistical Areas (CBSAs) and 1,163 counties located in all 50 states and the District of Columbia.
US Housing National Price Forecast
Looking ahead, the CoreLogic HPI Forecast projects that home prices will decline slightly on a month over month basis (-0.2%) from November 2023 to December 2023, reflecting the seasonal slowdown in the housing market. However, on a year over year basis, home prices are expected to increase by 2.5% from November 2023 to November 2024, as demand remains strong and supply remains tight.
The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
Please note that forecasts and actual results may vary. For the most accurate and up-to-date information, it’s best to consult with a real estate professional or financial advisor.