The housing market report from Bright MLS forecasts stable home prices, lower mortgage rates, and more homes on the market as sellers venture off the sidelines. But although it's anticipated that mortgage rates will begin to come down in 2024, homebuyers and sellers hoping for rates to return to pre-pandemic levels are likely to be disappointed and affordability will remain a challenge.
The report anticipates "a new era for mortgage rates," in 2024, in which rates settle at between 6% and 6.5% as the Federal Reserve continues to keep interest rates high and persistently high bond yields do their part to keep mortgage rates elevated. But home prices should remain relatively stable.
Between 2019 and 2022, the median home price nationally rose by more than 40%, or by about 13.7% annually, a much faster past of price appreciation than during a typical market. Strong demand during the pandemic, fueled by historically low mortgage rates and increased savings, drove up home prices. Price growth has moderated in 2023, and the forecast is for the 2023 median price to be up by just 1.1% compared to 2022.
Looking ahead, several factors will push and pull at home prices. More inventory will be generally offset by more buyers in the market. As a result, it is expected that, overall, the median home price in the U.S. will grow modestly, rising to $394,200 for 2024, a 1.5% increase over 2023.