We end the year with moderate increases in home prices, constricted inventory, and many buyers feeling hesitant in the face of more expensive borrowing. As of November 2023, the median sale price for existing homes in the U.S. reached $387,600, marking the fifth consecutive month of year-over-year price increases and despite October's 8 percent, the average 30-year mortgage rate still stands at 6.88 percent, offering a welcome relief from recent 20-year highs.
Expert Forecasts for 2024: Home Price Projections and Sales
Experts anticipate a 2.8% increase in home prices by the end of 2023, with another rise of 1.5% projected for 2024. Bear in mind when so called "Experts" talk about real estate it's most often very generalized as they are speaking about national averages. Real Estate has always been hyperlocal and locally I beleive the Triangle area will see greater appreciation due to lack of supply and increasing demand. North Carolina and the Research Triangle area specifically continue to be one of the fastest growing high demand areas within the US. The median sale price, which is already at historic highs, is expected to continue its upward trajectory, and where existing-home sales experienced a decline, a projected increase is anticipated. A forecast predicting a rise in activity, is promising for those considering a move, but of course there are a number of other factors influencing the market.
Factors Influencing the Market:
Interest: Mortgage rates nearly doubled in 2023 and have remained relatively high, but this is relative. The rates are not as high compared to prior to 2008 for example. The Federal Reserve's role in 2023 will likely continue to mitigate inflation, but many experts anticipate the hikes to ease and in fact mortgage rates are now the lowest they've been in many months. I suspect that they drop another 1% by June of 2024 and possibly a little bit more.
Affordability: Affordability is a result of the balance between home prices, mortgage rates, and inventory levels. Housing has increasingly become unaffordable but it is really important to remember when we discuss affordability, the most unaffordable option is to rent. Homeowning solutions are available that stabilize housing costs.
Inventory: Housing inventory, in the Triangle, and nationally is low. In 2023, there has been an average of only a 3.5-month supply available. A balanced market is considered a 5 to 6 months' supply. We are seeing more new-construction homes hitting the market which will help alleviate this however, in the Triangle, there is sustained demand and more people moving here. Currently in the Triangle there are only 2 months of homes on the market.
Navigating Challenges of 2024:
Experts predict moderation in home price appreciation to around 3-4% and prices are unlikely to drop. The market's ability to absorb increased home construction may mitigate drastic price fluctuations. With constricted inventory, comes an incredible favorable market for sellers. Especially if you are considering downsizing, this is very favorable. Where we might see a cooling of mortgage rates, even slightly, buyers will always be looking for homes in the RTP.
Choosing your Triangle Expert
Seeking guidance from a top expert in your area is really the best way to position yourself for success in real estate in 2024. Whether you're a buyer or a seller, having someone who understands real estate, down to the block, is essential to selling or buying a home. We have that insight. Contact My NC Homes today.
Posted by Larry Tollen on
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