Key Details:
- The National Association of Realtors released its 2024 housing market forecast, with an improved outlook for homebuyers and existing home sales reaching 4.71 million in the coming year—even more bullish than Redfin’s recent projections.
- NAR’s forecast includes little change in median home prices and an average 30-year fixed mortgage rate of 6.3%. NAR also expects the Fed to cut rates four times in 2024.
- Austin, TX, tops NAR’s list of the 10 real estate markets with the most pent-up housing demand in 2024.
Until now, Redfin’s predictions for existing home sales in the coming year were the most bullish, with a forecasted 4.3 million home sales in 2024. But with the release of its 2024 housing market forecast, the National Association of Realtors® (NAR) has pulled ahead.
NAR is forecasting 4.71 million existing home sales for 2024 as part of its outlook for homebuyers in the next 12 months. That figure is up 13.5% from the 4.1 million total sales they anticipate for 2023.
According to NAR’s projections, the 2024 median home price won’t change much at the national level, for the second year in a row. Assuming incomes rise, slower price growth could improve affordability, especially if mortgage rates continue their downward slide.
Highlights from the NAR 2024 housing forecast
Chief Economist Lawrence Yun shared the following highlights of NAR’s forecast for 2024:
- Existing home sales: 4.71 million—up 13.5% from 2023
- Median home price: $389,500—up 0.9% from 2023
- Rent prices in 2024 will calm down further, due to the increased multifamily supply, which will hold down the CPI.
- The foreclosure rate will remain at historically low levels in 2024, accounting for less than 1% of all mortgages
- U.S. GDP will grow by 1.5%, avoiding a recession
- Net new job additions will slow to 1.7 million—compared to 2.7 million in 2023 and 4.8 million in 2022.
- Mortgage rates will continue to decline—with an average 30-year fixed rate of 6.3%.
- The Fed will cut rates four times in 2024 in response to slower economic activity
- Housing starts: 1.48 million, including 1.04 million single-family and 440K multifamily
- The top real estate market to watch (in 2024 and beyond): Austin, TX
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.
NAR’s top 10 real estate markets with the most pent-up buyer demand in 2024
NAR also identified 10 real estate markets with the most pent-up housing demand, based on how they compare to the national level on 10 key economic indicators:
- More “returning” buyers
- Lower home price appreciation
- More renters who can afford to buy the median-priced home
- More potential home sellers
- A larger decline in remote workers
- More affordable listings for first-time homebuyers
- Stronger job growth
- Faster wage growth
- The greatest number of high-earning millennial renters moving into the area
- Lower violent crime rate
Based on those indicators, Austin, TX emerged as the #1 real estate market to watch in 2024 and beyond, with the most pent-up demand.
10 markets with the most pent-up housing demand in 2024:
- 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
The demand for housing will recover from falling mortgage rates and rising income. 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 U.S. markets will experience faster recovery in home sales.
Read the full report for more information.
Yun unveiled the forecast on Tuesday, December 12, during NAR’s fifth annual year-end Real Estate Forecast Summit: The Year Ahead. Click here to review all the forecast summit materials, including a video recording and presentation slides.
