The Real Estate Outlook for 2024
2023 Real Estate in Review
In 2023, we saw mortgage rates on a 30-year fixed mortgage begin the year at 6.48% before surging to a high of 7.79% during the fall, before settling back to the mid-6% range by year’s end. With rates fluctuating between 6.5% and 7.5% for the year, it’s not surprising to learn we witnessed the slowest period of home sales in the United States since 1993.
We can attribute the slowing of home buying last year into two factors;
High Mortgage Interest Rates
What’s ahead for 2024?
According to Lawrence Yun, the chief economist of NAR (National Association of Realtors) he is expecting the Fed will cut rates four times in 2024.
This is a significant positive outlook for two primary reasons;
Employees who have access to our homeownership assistance benefit will have multiple opportunities to refinance their mortgage loans at no-cost to save money on their monthly mortgage payments.
Available home inventory will increase as interest rates decrease. Homeowners will finally be comfortable selling their current property and its associated low interest rate when rates fall to a level in which trading rates for a new property become financially manageable.
Life Events will Create Demand for Homeownerhip
As prospective homebuyers sat on the sidelines in 2023, life events continued to occur which will ultimately drive future demand to change their respective living arrangements.
Family creation is a primary factor in homeownership demand with the desire for more space when household size increases. There are 3.6 million babies born annually in the U.S. along with 2 million marriages occurring annually.
The combination of these annual occurrences will have an impact on pent up demand for real estate heading into 2024. Consumers who have been on the sidelines or attempting to time the market will be ready to take advantage of our homeownership assistance benefit this year.
Our pathway to helping buyers achieve their homeownership goals is through a “buy the house and rent the interest rate” mentality. The impact of an interest rate change is meaningful for a homeowner. Just a 1% interest rate change can save a homeowner $200 to $300 a month on a typical home mortgage. These considerations in combination with access to our homeownership assistance benefit will unlock homebuying opportunities for individuals in 2024.
