Real Estate Tips From Ronnie Jordan: The real estate market surprised in 2023 with a resilient stock market and a robust job market. As 2024 begins, attention shifts to the housing market and the potential for a soft landing, mirroring the Federal Reserve’s strategic move for the broader economy.
Anticipation for lower mortgage rates in 2024 may drive demand, particularly for new homes, boosting builder confidence. However, the “lock-in effect” looms large. Almost 90% of homeowners have mortgage rates below 5%, leading sellers to delay listings until rates drop or prices adjust.
While housing markets are expected to thaw with lower mortgage rates, disparities between local incomes and housing prices may trigger declines. This is especially true if remote work diminishes. The rental landscape may shift too, with oversaturated markets witnessing short-term rentals converting to long-term leases, giving renters more bargaining power.
Reflecting on 2023’s unexpected events, the Federal Reserve’s successful soft landing in the fight against inflation stands out. Despite initial skepticism, Fed Chair Jerome Powell’s cautious approach yielded positive results, impacting housing dynamics. Challenges persist, with potential hurdles like rising oil prices, geopolitical tensions, and supply chain disruptions.
Looking ahead, predictions for the 2024 housing market foresee a modest 0.7% national increase in existing home prices. This is driven by a robust economy and declining mortgage rates. Existing home sales may see an uptick, while new home sales continue their ascent. Rental markets might experience stabilization or even slight declines, particularly in areas facing supply gluts.
As the year unfolds, the trajectory of housing starts will diverge between single-family and multifamily sectors. Factors such as mortgage rates and market demands will influence this. Despite the Federal Reserve’s efforts, experts anticipate that mortgage rates will stay above 6%, and sub-6% rates are not expected until 2025. The year ahead promises both opportunities and challenges in the ever-evolving realm of real estate.
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