Lawrence Yun also said the housing market will improve for buyers next year.
WASHINGTON – NAR Chief Economist Lawrence Yun forecasts 4.71 million existing homes will be sold, the housing market is expected to grow, and Austin, Texas, will be the top real estate market to watch in 2024 and beyond. Yun unveiled the association's forecast yesterday during NAR's fifth annual year-end Real Estate Forecast Summit: The Year Ahead.
Yun predicts home sales will begin to rise next year – by 13.5% compared to 2023, and the median home price will reach $389,500 – an increase of 0.9% from this year.
"Metro markets in southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region."
Yun expects rent prices to calm down further in 2024, which will hold down the consumer price index. He predicts foreclosure rates will stay at historically low levels in 2024, comprising less than 1% of all mortgages.
Yun forecasts the U.S. GDP will grow by 1.5%, avoiding a recession, with net new job additions slowing to 1.7 million in 2024 compared to 2.7 million in 2023, and 4.8 million in 2022. After eclipsing 8% in late 2023, he expects the 30-year fixed mortgage rate to average 6.3% and for the Fed to cut rates four times – calming inflationary conditions – in response to slower economic activity.
Yun also foresees 1.48 million housing starts in 2024, including 1.04 million single-family and 440,000 multifamily.
Top 10 Real Estate Markets with the Most Pent-Up Housing Demand in 2024
NAR identified 10 real estate markets with the most pent-up housing demand, which it expects to outperform other metro areas in 2024. In order, the markets are as follows:
- Austin-Round Rock-Georgetown, Texas
- Dallas - Fort Worth-Arlington, Texas
- Dayton - Kettering, Ohio
- Durham - Chapel Hill, N.C
- Harrisburg-Carlisle, Penn.
- Houston-The Woodlands-Sugar Land, Texas
- Nashville-Davidson-Murfreesboro-Franklin, Tenn.
- Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
- Portland-South Portland, Maine
- Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
"The demand for housing will recover from falling mortgage rates and rising income," Yun said. "In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years. The selected top 10 U.S. markets will experience faster recovery in home sales."
NAR selected the top 10 real estate markets with the most pent-up housing demand in 2024 based on how they compared to the national level on the following economic indicators: 1) more "returning" buyers; 2) lower home price appreciation; 3) more renters who can afford to buy the median-priced home; 4) more potential sellers; 5) a larger decrease in remote workers; 6) more affordable listings for first-time buyers; 7) stronger job growth; 8) faster income growth; 9) most high-earner millennial renters moving into the area; and 10) lower violent crime rate.
To read more about NAR's Markets with the Most Pent-Up Housing Demand report, click here. This and all forecast summit materials – including a video recording and Yun's presentation slides – will be available here.
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