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Could 2024 Bring a Housing Rebound?

Jan 16, 20241 min read

Could 2024 Bring a Housing Rebound?

After another year of tight inventory and high rates, the housing market is showing positive movement.


November and December saw steady drops to 30-year fixed mortgage rates. 6.61% for the week ending December 28, 2023. Lowest average since May 2023. Down more than one percentage point from October. November listings reached highest level in nearly a year. Up 1.3% Month over Month, seasonally adjusted. Total active listings saw largest increase since July 2022. Up 3.9% Month over Month. November Existing-Home Sales up 0.8% Month over Month, seasonally adjusted. First increase in 5 months.


The end of the year saw an uptick in mortgage activity ahead of the holidays.



Mortgage applications increased the first week of December. Up 7.4% Week over Week, seasonally adjusted. The refinance share of mortgage activity increased. 39.2% of total applications. Refinance Index: up 19% Week over Week, up 27% Year over Year. Construction activity also climbed. Housing starts in November hit 1.56 million. Up 14.8% Month over Month up 9.3% Year over Year. Single-family housing starts in November rose 18% Month over Month to 1.14 million.

Lower rates and increased inventory point towards improved affordability and steady home sales.


Momentum is expected to continue in 2024. Redfin Forecast: 4.3 million home sales, up 5% Year over Year, Home prices decrease 1%. Realtor.com Forecast: 4 million home sales, up 0.1% Year over Year, Home prices decrease 1.7%. National Association of Realtors® Forecast 4.71 million home sales, up 13.5% Year over Year, Home prices remain largely unchanged. Fannie Mae projects mortgage rates to settle around 5.7% in 2024.

 
Sources:
1. Freddie Mac, Primary Mortgage Market Survey, week ending December 28, 2023.
2. Redfin, “Falling Mortgage Rates Breathe New Life Into Housing Market as Listings, Pending Sales and Price Growth Hit Highest Level in Roughly a Year,” December 15, 2023.
3. National Association of Realtors® (NAR), Existing-Home Sales, November 2023.
4. Mortgage Bankers Association (MBA), Weekly Mortgage Applications Survey, week ending December 8, 2023.
5. U.S. Census Bureau, HUD, Monthly New Residential Construction, November 2023.
6. Redfin, “Redfin Predicts 2024 Will Be the Year Homebuyers Catch a Break, With Home Prices Falling and New Listings Rising, ”December 5, 2023.
7. Realtor.com, “2024 Housing Market Forecast and Predictions: Housing Affordability Finally Begins to Turnaround, ”November 29, 2023.
8. NAR, “NAR Forecasts 4.71 Million Existing-Home Sales, Improved Outlook for Home Buyers in 2024,” December 13, 2023.
9. Fannie Mae, “Expert Panel Sees Home Prices Rising 2.4% in 2024 and 2.7% in 2025, New Fannie Mae Survey Shows, ”December 11, 2023.



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