None of us have a crystal ball, but we all speculate what the coming year will bring in life and in real estate. In real estate, it is important to at least try to plan for what may come. Here you will find my educated guess based on my own experience and listening to the expertise of those available to me as a member of the National Association of REALTORS (NAR). This includes a full economics department and at least 2 doctorate level economists. I’ll take their opinions any day over speculation in the streets. Certainly, as the year progresses, they and I will adjust based on new information received and I suggest you do the same.
Before we look at where we’re going, we should look at where we’ve been. After an extended period of historically low interest rates, we saw mortgage rates increase significantly in 2023, peaking in October. Since then (at least at the time of me writing this) they have slowly inched downward.
Welcomed News For Buyers
Based on the forecast of our Chief Economist at NAR, Dr. Lawrence Yun, I expect that we will continue to see interest rates in the high sixes for the beginning of the year and averaging out for the year around 6.3%. This will be welcome news for buyers. Locally, I think interest rates staying below 7 will be a beacon to the marketplace for buyers. More buyers entering the marketplace will entice more sellers that have been holding off, to finally list their properties for sale. This includes sellers that need to “right size” their home. Meaning they are looking to downsize or upsize, etc. and need to sell before they can buy. Many of these sellers have been on hold partially because of interest rates on a new purchase and partially for lack of options to buy. I think a reduction of rates will help fuel these consumers to jump in as well, which will create more available housing.
We saw extensive buyer fatigue in the last quarter of 2023. Typically, from around Thanksgiving to New Year’s we see a lull in the real estate market. In 2023 we saw it come sooner and stronger than the past few years, as buyers became exhausted from lack of choices and interest rates that made the already high property values out of reach for many. While buyers took a needed break from the market, most still need housing.
It is because of this pent-up demand combined with reduced rates that NAR predicts 4.71
million existing-home sales nationally in 2024, up 13.5% from around 4.1 million in 2023. Dr.
Yun predicts that, "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."
A Hopeful Foot Forward
We expect that home sales will increase everywhere to some degree including in the North
Country. For buyers this means that as interest rates come down, increasing your buying
power, you may have more competition.
Overall, I believe we will see a more active real estate market for 2024. More options and lower interest rates for buyers. And for sellers there will be the benefit of more buyers re-entering the marketplace. I think it will continue to become a more balanced market which is good for our region.
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