By Maura Stevens
January 4, 2024

As we start the new year, many people are wondering what to expect from the 2024 market.  Let’s take a look at what the economists are saying about the real estate market for the coming year.

Mortgage Rates
Expect to see mortgage rates come down.  Most economists predict an interest rate in the mid 6 percent range, some predicting as low as 6.3 %.  The lower rates may happen later in the year rather than in the in the first quarter.  It is the exact opposite of what we saw in 2023 where the mortgage rates were lower at the beginning of the year and then the fed hiked interest rates and mortgages rates continued to climb through early Fall.

Inventory
Inventory continue to be very tight in the DMV area. This is due to those homeowners that are sitting on a mortgage with 2-3% interest rates.  The experts are predicting that inventory will be down 20-25% in 2024.

Affordability and Home Prices
Affordability, particularly for first time homebuyers, continues to be an issue.  Housing prices have been continuously rising in the Northern Virginia market for past several years.  A dip in mortgage rates will help improve affordability – because buyers will have more buying power, but tight inventory will dampen that a bit. Economists anticipate that housing prices in Northern Virginia will continue to rise but at a more moderate pace this year.

Buyers
A decrease in mortgage rates will bring back buyers that were priced out of the market when the mortgage rates peaked to a 23 year high in November.  Suggestions for buyers:

• Get pre-approved so you can act when you find the right house and so you know your home budget.
• Expect competition – with a decrease in mortgage rates – more buyers will jump back into the market.
• Reevaluate your search.  If you are having a hard time ratifying on a single family home – consider a townhome.
• If you are waiting for interest rates to drop to 3% again – you may never own a home.  Rates are not going back down to 3%.

First Time Homebuyers

• Will be challenged by limited inventory in starter-home price range.
• Try to take advantage of the anticipated dip in interest rates.
• Seek out programs for first time homebuyers.

Sellers

• The lower mortgage rates will help bring back some of those sellers who are have been waiting for rates to drop.
• Changing family and financial situations will also bring some sellers back into the market.
• Houses that are priced correctly and show well will sell quickly.  It is key for sellers need to be realistic about pricing their home for sale based on the local market.

There is a lot of information out there from experts regarding the 2024 real estate market.  For more information check out the following resources:

NVAR/GMU 2024 Residential Real Estate Market Forecast,  National Association of Realtors 2024 Forecast and Bright MLS National Housing Market Outlook 2024

If you have questions or would like to talk about buying or selling a home please reach out to the FOCUS on NoVA team