Rosalind Evans
The housing market’s trajectory for the latter half of 2024 has experts divided, with some anticipating improvements while others remain cautious.
Initial Optimism and Varied Predictions
“Mostly, we think the housing market is going to improve over the next half of the year,” stated Glenn Kelman, CEO of Redfin, during his May 22 appearance on CNBC’s “Money Movers.” Kelman believes the market hit rock bottom in the first quarter of 2024 and expects a slight recovery.
Conversely, Jeff Ostrowski, a housing analyst at Bankrate.com, highlighted the unpredictable nature of the current market. “It’s a very strange market, and it’s kind of hard to predict,” he said, reflecting the uncertainty among experts.
Increase in Housing Supply
One significant factor shaping the market is the increase in housing supply. Orphe Divounguy, senior economist at Zillow, noted the diminishing mortgage rate lock-in effect, which previously deterred homeowners with low rates from listing their homes.
Realtor.com reported a 2.1% rise in newly listed homes in the week ending June 1 compared to the previous year, with the available inventory of homes for sale growing by 35.5%. Despite this, Doug Duncan, senior vice president and chief economist at Fannie Mae, pointed out that ongoing affordability challenges may slow the conversion of these listings into actual sales. “Listings have trended generally upward of late, suggesting to us that a rising number of current homeowners can no longer put off moving,” Duncan said.
Shifts in Mortgage Rates
The 30-year fixed-rate mortgage dropped to 6.99% on June 6, down from 7.22% on May 20, as per Freddie Mac data via the Federal Reserve. However, this decline has not yet spurred significant buyer competition, according to Divounguy.
Jessica Lautz, deputy chief economist at the National Association of Realtors, mentioned that a potential interest rate cut by the fall might provide some relief. “By late September, perhaps we will start seeing movement on the Fed funds rate,” she stated. However, she also noted that buyers might not experience much financial relief due to rising home prices.
Home Prices Remain Resilient
Despite a slowdown in transactions, home prices have continued to rise. The median home sale price in the U.S. increased to $392,200, a 4.4% year-over-year jump, according to Redfin. Ostrowski remarked, “It’s hard to foresee prices really cooling or declining nationally.”
Certain metropolitan areas, such as Austin, San Antonio, and Fort Worth in Texas, have seen slight declines in home prices. However, Jessica Lautz emphasized that many of these areas experienced significant price surges during the COVID-19 pandemic, with prices increasing by up to 45%.
The housing market in the second half of 2024 presents a mixed outlook, with an increase in housing supply and fluctuating mortgage rates. While some areas may see slight price adjustments, overall home prices are expected to remain high, driven by continued demand and limited inventory. As experts weigh in, potential buyers and sellers alike should stay informed and prepared for a dynamic market environment.
