Housing Market 2024: What’s on the Radar for the Second Half of the Year, According to Experts
When evaluating the housing market trends in the second half of 2024, it is important to remember that home prices can fluctuate. The median existing-home price across the nation was $426,900 in June, up 4.1% from a year ago, according to the National Association of Realtors.
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Mortgage rates, asking prices and closing terms can change also, so you should consider these carefully when buying or selling a house. Research can be a valuable tool in making important decisions involving purchasing your forever home or when it comes time to sell your current one.
Here’s what’s on the radar for the housing market during the second half of 2024, according to experts.
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Trends for Home Prices in the Second Half of 2024
“In the second half of 2024, you should expect high home prices and slightly lower mortgage rates later in the year,” said Chris Hoffman, a real estate agent with over 17 years of experience.
“Hopeful buyers should start preparing as early as possible by saving money and improving their credit. Though mortgage rates are still relatively high, experts generally predict we’ll see mortgage rates go down a little bit this year. The average 30-year fixed mortgage rate could end up in the 6.5% to 7% range.”
Dennis Shirshikov, head of growth at Summer, said: “In the second half of 2024, I anticipate home prices to experience moderate growth. Economic stability and steady employment rates are likely to support demand, but the growth rate may be tempered by rising interest rates. For example, while cities with robust tech sectors, like Austin and Seattle, might see higher price increases due to continued demand, more balanced markets could witness more modest gains.”
Buyer and Seller Behavior Changes
Hoffman suggested that some sellers may need to be more flexible with their asking price — or closing terms — to attract buyers.
“Be prepared to negotiate and consider offering incentives, if necessary,” he recommended. “Buyers should not expect a return to the pre-pandemic frenzy of bidding wars. The market is likely to favor a more measured approach. Be patient, do your research, and avoid rushing into a decision.”
Shirshikov said that buyers are likely to err on the side of caution, especially as interest rates climb, which makes affordability an issue.
“Sellers, on the other hand, might be more inclined to list their properties before rates climb further, creating a more competitive market,” he explained. “For instance, we could see an increase in properties listed in suburban areas as sellers capitalize on still-high demand from remote workers looking for more space.”
Impact of Interest Rates and Mortgage Availability
“Higher interest rates will undoubtedly impact the housing market by reducing buyers’ purchasing power,” Shirshikov added. “This could lead to a slowdown in home price appreciation as demand moderates.”
“However, mortgage availability remains crucial; stricter lending standards could further limit buyer activity, whereas accessible financing options might help offset some of the interest rate impacts,” he continued.
Predictions for Housing Inventory Levels
Shirshikov said that although housing inventory is likely to remain tight, there might be a slight increase in housing inventory levels as more sellers enter the market anticipating higher interest rates.
“This incremental rise in inventory could provide some relief for buyers, but not enough to drastically shift the supply-demand dynamics,” he explained. “In areas like the Sun Belt, where new construction is more feasible, inventory levels might see a more noticeable uptick.”
Changes in the Rental Market
Hoffman said that with the rise of millennials and Gen Z as renters, a growing need is emerging for rental properties that offer convenience, affordability and amenities tailored to modern living standards.
“Moreover, economic factors such as job mobility and uncertainty have contributed to a preference for renting over homeownership among certain segments of the population,” he said.
Shirshikov said that the rental market is expected to hold strong due to higher home prices and interest rates that encourage potential homebuyers to continue renting.
“This trend is particularly evident in urban centers where renting remains more affordable than buying,” he explained. “Additionally, cities with strong job markets and vibrant economies will likely see increased demand for rental properties, maintaining upward pressure on rents.”
Advice for Homebuyers or Sellers
Hoffman said that because this housing market is so dynamic, you should make sure your finances are in order — and also to be ready to act quickly, whether you’re a homebuyer or seller.
Shirshikov said that potential homebuyers should focus on financial preparedness by having a solid credit score and getting a pre-approval for a mortgage because it can give them a competitive edge.
“Buyers should also consider exploring less conventional mortgage products that might offer lower initial rates,” Shirshikov recommended. “For sellers, it’s a good time to list properties before interest rates climb further, potentially dampening buyer enthusiasm. Strategically pricing homes to attract serious offers quickly can also be advantageous in a fluctuating market.”
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This article originally appeared on GOBankingRates.com: Housing Market 2024: What’s on the Radar for the Second Half of the Year, According to Experts
