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Despite the challenges faced in 2023, experts are optimistic that the 2024 housing market is poised for a comeback. Here are the three most compelling reasons this could be a promising year for the real estate market:
1. Anticipated Surge in Housing Inventory
Experts are optimistic due to the anticipated rise in housing inventory. The challenges of limited available homes in 2023 are projected to ease as the year unfolds. With a hopeful outlook for more homes coming onto the market, potential buyers may find a larger range of options, addressing an ongoing concern that hindered the market in the previous year.
2. Favorable Impact of Lower Mortgage Rates
Lower mortgage rates stand out as a beacon of hope for the housing market in 2024. As of January 18, rates have dipped to 6.6%, down from the previous week and up slightly from a year ago. The reduction in mortgage rates enhances affordability for homebuyers, potentially launching increased activity in the real estate market. This positive shift is a key element in experts’ confidence about the prospects for the year.
3. Confidence in Economic Growth
Experts express confidence in sustained economic growth, a crucial factor contributing to their positive outlook. A strong economy is typically correlated with a robust housing market. As job markets stabilize and income levels rise, prospective homebuyers are more likely to enter the market with increased confidence.
Lawrence Yun, chief economist for NAR, expects the real estate market to rebound in 2024, citing lower mortgage rates and an anticipated increase in inventory. However, he emphasizes the need for sustained economic and income growth and a steady buildup of home construction to avoid magnifying the imbalances in homeownership.
