The real estate market in late 2024 is showing signs of gradual improvement, particularly in terms of mortgage rates, but challenges remain. Mortgage rates, which surged to two-decade highs in 2022, are finally declining. The current rate for a 30-year fixed mortgage is around 6.08%, the lowest it has been in two years, and experts anticipate further reductions by the end of 2024(Business Insider)(Realtor). However, affordability remains a challenge due to still-high home prices, which are expected to continue rising through 2024.
Despite the easing of mortgage rates, home prices are forecast to increase between 3.8% and 6.1% by the end of the year. The market remains constrained by low inventory, with the U.S. short by about 4.5 million homes. This persistent undersupply is driving prices up despite lower borrowing costs(Business Insider).
On the positive side, housing inventory has been improving in 2024, increasing by about 35% year-over-year(Realtor). While this provides more options for buyers, sellers are often waiting longer to close deals, and demand remains strong in most regions due to limited supply. Consequently, even though the market is becoming slightly more buyer-friendly with falling rates, it remains competitive and expensive, especially in major metropolitan areas(Realtor)(Realtor).
If you’re considering entering the market, it may still be a challenging time to find affordable options, but falling mortgage rates should provide some relief over the coming months.