Homebuyers may find relief in 2024, according to Redfin’s annual predictions. The real estate brokerage anticipates a favorable shift as mortgage rates come down and listings go up. Despite this positive outlook, Redfin acknowledges that housing costs will persist as a challenge, particularly for young families, leading to increased demand for large rentals. President Joe Biden is urged to prioritize affordability as a cornerstone of his reelection bid in 2024.
Zillow’s Perspective on 2024
Zillow, a Seattle-based real estate giant, echoes a similar sentiment in its predictions released on Nov. 30. The company foresees improved options and affordability for homebuyers, albeit marginally, following the 20-year-high mortgage rates of 2023. Zillow suggests that single-family rentals will become the new starter home, emphasizing the need for flexibility in the evolving housing market landscape.
Current Real Estate Landscape in Seattle
As of now, the median sale price in Seattle stands at $815,000, reflecting a 4.1% decrease from the previous year, according to Redfin. Zillow reports the average home value in Seattle as $827,235, down 2.8% over the past year. These figures underscore the dynamics of the real estate market in one of the nation’s key metropolitan areas.
Redfin’s Seven Predictions for the 2024 Housing Market
Home Prices Will Fall 1%
Redfin anticipates a potential decline in home prices, projecting a 1% year-over-year decrease in the second and third quarters of 2024. While acknowledging that prices may still be prohibitive for many Americans, Redfin sees any break in the affordability crisis as a positive development.
New Listings Will Tick Up
Redfin notes a double-digit annual increase in homeowners seeking assistance in selling their homes. The company interprets this as a sign that homeowners, recognizing current mortgage rate trends, aim to sell before potential price declines.
Home Sales Will Increase by 5%
Redfin predicts a year-over-year increase of 5% in home sales, amounting to approximately 4.3 million sales nationwide in 2024. This marks a crucial difference from the sales momentum observed in 2023.
Mortgage Rates Will Decline but Remain Above 6%
Redfin foresees a gradual decline in mortgage rates, with the average 30-year rate lingering at 7% in the first quarter of 2024. However, the rate is expected to fall to approximately 6.6% later in the year, providing some relief to homebuyers.
Change in the Real Estate Industry
Redfin envisions a shift in how homebuyers interact with the real estate industry, with more buyers working directly with listing agents. Additionally, sellers may find themselves negotiating commissions with listing agents more frequently, influenced by increased transparency on agent costs.
Renting Will Lose Its Stigma
As homeownership affordability remains a challenge, Redfin suggests that renting may become more appealing to millennials and Gen Z. Large rental unit prices are expected to climb as demand outstrips supply, leading builders to focus more on creating “family-friendly rental units.”
Biden’s Housing Challenge
Redfin points out that rising home prices during Biden’s term could pose challenges to his reelection bid. While the overall economy is strong, high housing costs may impact voters’ perceptions of their economic well-being, particularly among young people. Redfin expects both Democrats and Republicans to propose housing policy changes to address these concerns.
In conclusion, the predictions from Redfin and Zillow offer insights into the potential shifts in the real estate landscape in 2024. While there’s optimism about improved affordability and increased options for homebuyers, challenges persist, necessitating a focus on innovative solutions and policy changes to address housing issues.