Looking ahead to 2024, Zillow predicts home buyers will have a little more breathing room, but only a little.
For real estate, the main news in the sector this year has been the affordability challenge caused by the fact that Mortgage rates hit 20-year highs.
Buying a home will continue to be expensive, which will keep pressure on the rental market to serve families who will stay renting longer than previous generations. Many of those who buy They will turn to houses that need some workaccording to Zillow predictions, and self-made improvements and repairs will keep the new owners busy.
“I hope that next year begins a long recovery process in the real estate market“said Skylar Olsen, chief economist at Zillow.
“We know that there are a large number of households at the best ages to buy homes waiting for the winds to turn in their favor. While it still presents challenges, the market will be better for buyerswith more homes to choose from and greater affordability,” Olsen added.
The report notes that many will continue to look toward rentals, and given the demographics of renters, demand for single-family homes in particular will be strong.
It also indicates that more homes will come to market as homeowners accept that current mortgage rates remain the same.
It’s increasingly clear that high mortgage rates have some staying power, but Zillow economists expect more homeowners who locked in long-term payments when rates were near record lows will put their homes on the market, as they get tired of waiting for historically low 2021 rates to return.
Zillow notes that with mortgage rates rising over the past two years, homeowners They have been reluctant to sell and have chosen to maintain the ultra-low interest rate on their current mortgage.
Many of those homeowners will have their eye on a home with a larger backyard, an extra bedroom or in their preferred neighborhood across town, and Zillow predicts that more than These owners will end their resistance to lower rates and they will continue with those measures.
The report for 2024 predicts that Home buying costs will stabilizegiving hopeful buyers a chance to catch up.
“A typical home buyer in October would have spent more than 40% of their income on their mortgage payment, an all-time high” according to Zillow data dating back to the 1990s. “While affordability will certainly remain being the main concern for potential home buyers in 2024, There are reasons to expect those challenges to ease somewhat.”.
Zillow’s latest forecast calls for home values to remain stable in 2024: “Predicting how mortgage rates will move is a nearly impossible task, but recent inflation news gives the impression that rates are likely to move as well. remain quite stable in the coming months.”
For real estate analysts, it is likely that the cost of buying a home will stabilize next year, with the possibility that costs will fall if mortgage rates do so: “That would give buyers time for wages and savings to grow.good news after the rapid increase in housing costs over the past two years.”
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