arhome realty blog

2024 housing market outlook

As we step into the new year, the real estate market continues to evolve, presenting both challenges and opportunities. Below are key factors shaping the 2024 housing market and what they mean for those looking to buy or sell their homes.

1. low inventory levels.

Looking forward, demand will most likely continue to exceed supply. Illinois specifically has a slow growth in the number of homes being built compared to the rest of the country. Predictions of slight mortgage rate declines would help bring more home sellers into the market and increase the amount of inventory, however, it is unlikely that we'll see a drastic change from the status quo. 

2. mortgage rates could decrease.

While mortgage rates have come down from their peak, they still remain relatively high. On one hand, lower rates provide some relief to potential buyers. On the other hand, these rates are still significantly high overall, and deter potential buyers from entering the market. Economists predict a slight decrease in rates, however, not a great decline. According to Dr. McMillan, professor of real estate and Associate Dean for Faculty Affairs at the University of Illinois-Chicago, the economy is actually looking fairly strong, and all the signs point to a successful reduction in inflation, which could bring down interest rates.

4. annual home values are stable.

Home prices will most likely continue to stay high in 2024, with a steady growth in sales prices. There is still significant demand from buyers, and inventory is low—meaning that prices are not predicted to plummet anytime soon. For sellers, this means your equity is predicted to remain stable so far. Dr McMillan also predicts a limited growth on the number of sales, but no one can say for certain.

5. a market crash is unlikely.

Most real estate experts agree that a crash is unlikely, citing a low supply of homes, which keeps home buying competitive and therefore prices stable. And since homeowners have gained a significant amount of equity growth during the last couple of years, it's unlikely that foreclosures will be a big threat either. 

As we navigate the 2024 housing market, it's crucial for both buyers and sellers to stay informed on what their options are. For buyers, lower mortgage rates mean increased affordability, potentially opening up the market to a broader range of individuals. This, in turn, could drive higher demand for homes and contribute to a more competitive market. For sellers, a surge in buyer activity could lead to increased competition, faster sales, and even higher prices. The prospect of lower rates may encourage hesitant sellers to enter the market, further alleviating the inventory shortage. As always, seeking professional advice and staying on top of market trends will be key to making informed decisions in the year ahead.

Contact us for a free market analysis.