NAR unveils hotspots for housing demand
The US housing market is poised for growth in 2024 as mortgage rates decline and income increases, according to the National Association of Realtors (NAR).
NAR chief economist Lawrence Yun projected that home sales will start to recover next year, with expectations of a 13.5% increase compared to 2023.
Around 4.71 million existing homes are expected to be sold. The median home price will likely rise to $389,500, a modest 0.9% increase from this year.
Rent prices are also expected to stabilize in 2024, contributing to a controlled consumer price index. Foreclosure rates will remain historically low, making up less than 1% of all mortgages.
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Looking at the broader economic landscape, Yun forecast 1.5% growth in US GDP, steering clear of a recession. He predicted new job additions would slow down to 1.7 million in 2024 compared to 2.7 million in 2023 and 4.8 million in 2022.
After peaking above 8% in late 2023, the 30-year fixed mortgage rate is expected to average around 6.3%. Yun also anticipates that the Federal Reserve will reduce rates four times in response to slower economic activities, thus easing inflationary pressures.
In terms of housing starts, Yun predicts 1.48 million in 2024, including 1.04 million single-family homes and 440,000 multifamily units.
“The demand for housing will recover from falling mortgage rates and rising income,” Yun said in the report. “In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years. The selected top 10 US markets will experience faster recovery in home sales.”
The top 10 markets, which have the most pent-up housing demand, are expected to outperform others based on several economic indicators, such as the influx of “returning” buyers, lower home price appreciation, more renters able to afford median-priced homes, and stronger job and income growth.
The top markets include:
- Austin-Round Rock-Georgetown, Texas
- Dallas-Fort Worth-Arlington, Texas
- Dayton-Kettering, Ohio
- Durham-Chapel Hill, North Carolina
- Harrisburg-Carlisle, Pennsylvania
- Houston-The Woodlands-Sugar Land, Texas
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
- Portland-South Portland, Maine
- Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
“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,” Yun said.
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