After a crazy couple of years in the real estate market, we experienced the “soft landing” we hoped for this year as rising interest rates cooled the market. Many buyers and sellers decided to hold off buying and selling in hopes of lower interest rates in 2024. Luckily for all of us, interest rates are now trending downward and we are expecting 2024 to be a good year for real estate. Here are our 2024 SWFL housing market predictions:
Mortgage Rates
Historically, when mortgage rates exceed 7%, the market slows drastically and many sellers have felt that this year. Average days on the market crept up and prices dipped slightly as sellers tried to sell their homes in Q3 & Q4 of 2024. Luckily, the 30-year fixed-rate mortgage has been trending down for the past two months. It averaged 6.67% for the week ending December 21, which was the lowest this rate had hit since June. Federal Reserve officials forecast a median of three rate cuts in 2024. Though the Fed does not set mortgage rates directly, any decrease in its borrowing rate puts downward pressure on them. Mark Zandi, Chief Economist at Moody’s Analytics, predicts that mortgage rates will continue to trend downward in 2024 and hit 6% by this time next year. The Mortgage Bankers Association predicts that we will end 2024 with rates closer to 5.5%. No one can know for sure, but many signals point towards a downward trend over the next year.
SWFL Housing Inventory
Inventory has taken some time to bounce back, but we expect to see an increase in housing supply this year. Over 7 Million babies were born this year and over 7 million individuals turned 65. These major milestones typically trigger a need to size up or size down their homes. With interest rates hovering over 7% this year, many homeowners who need to make a change have put it off for as long as they can. About 80% of current mortgage holders have a rate under 5% and have been hesitant to relocate. With so many people ready to make a move, just a small decrease in interest rates would add a lot more homes to the market.
SWFL Home Prices
Home prices respond to buyer demand. If interest rates continue to trend downward, more buyers will begin to enter the market, increasing demand. However, as previously stated, so many sellers have been waiting for rates to drop before putting their homes on the market, increasing supply. For this reason, we expect to see normal appreciation this year, which typically is about 3-5% nationally. As always, we will see more appreciation in up-and-coming areas.
If you are planning to buy or sell in 2024, it is never too early to start preparing. A significant drop in interest rates could cause a surge of buyers to re-enter the market. Buyers need to talk to a mortgage lender early in the home-buying process. A good lender can help you perfect your finances by prioritizing debt paydowns and boosting their credit to give them the lowest rate possible. Sellers should stay in touch with a realtor so they are ready to list as soon as soon as possible. A good realtor will suggest home improvements to maximize profit and will keep them updated on the market.
Regardless of whether you are planning on buying, selling, or investing, we would love to help make 2024 your year! With over 13 years of combined real estate experience in SWFL, you can trust us to help you make the right move. Click to give John or Brianna a call or fill out the contact form below to get started!
