What the Housing Market Will Look Like by the End of Fall 2024, According to Experts
Even though the year is winding down, the real estate market is more unsure than ever. It’s hard to tell where things are headed – Are interest rates going down? Will there be more supply soon? Does the election affect any of this?
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GOBankingRates spoke to experts from across the real estate industry to get their insights on what to expect in the coming months. Keep reading for a closer look at where the market could be by the end of fall.
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Interest Rates and Federal Reserve Policy
Thomas J. Brock, a financial expert with multiple certifications at Annuity.org, provided his insight into the potential interest rate changes.
“The next Federal Open Market Committee (FOMC) meeting is scheduled for September 17 and 18. After a series of downward trending inflation readings, it appears as though the Federal Reserve is poised to cut the federal funds rate, which currently sits at a range of 5.25% to 5.50%, by 25 basis points (0.25%),” said Brock.
He further explained, “Mortgage rates have fallen in response to this expectation and will decline further if the Fed actually embarks on an easing campaign. Nevertheless, I do not expect rates to decline significantly by the end of the fall 2024.”
However, he remains cautiously optimistic about potential further cuts. Brock said, “… if inflation continues to trend downward, one or two more 25-basis point cuts could be in the cards for Q4.
“As a result, I expect the housing market to improve as we draw closer to the end of the year and into 2025. Buyers will benefit from a more affordable landscape, and sellers will benefit from the uptick in demand.”
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Post-Election Market Dynamics
Kristen Conti, the broker-owner at Peacock Premier Properties, said the election can absolutely affect the market.
“I am very optimistic about the housing market post the presidential election,” she said. “I have been a practitioner for 31 years, so I have been through seven election cycles. It does not matter what side of the political fence you sit on; it’s a tremendous time of uncertainty.”
When it comes to the current market conditions and future expectations, Conti said, “Years of high inflation and increased interest rates coupled with tremendous insurance costs here in Florida have stalled the market significantly.
“Now that interest rates are dropping significantly and the elections will soon be over, there is a lot of pent-up demand. People have needed to move for quite some time but have been locked into very low interest rates and couldn’t deal with the high post-COVID prices.”
Regional Market Variations
Realtor, Eric Schilling with eXp Realty in Arizona said, “At least in Phoenix, I can say the housing market has gotten a little slow over the last month for buyer demand.
“Between the higher outdoor temperatures, looming election and the fed targeting one, potentially two, rate cuts, a lot of buyers we talk with are sitting on the fence waiting to see what happens.”
Schilling continued, “The end of fall usually starts to show an uptick in buyer demand as we start to see more winter visitors coming down who begin their home buying journey for the springtime.”
James Kramer, another Arizona-based realtor with HomeSmart, provided a complementary perspective.
“Here in Arizona, we are seeing more of a balanced market and expect more of the same the rest of 2024,” said Kramer. “As interest rates begin to decline, I anticipate buyers who have been on the fence to get more active.”
He added, “We actually saw a spike in the mortgage applications the last two weeks… More activity [is] expected by the remaining part of 2024.”
Supply and Demand Dynamics
No one can deny the supply issues affecting the housing market.
“We still have a shortage of new homes nationwide that continues to drive real estate prices consistently higher,” said Schilling.
“In today’s market, buyers still have some leverage to negotiate for lower purchase prices and to have their closing costs covered. But should interest rates drop… we could be seeing their leverage dissipate and [the landscape] turn back into a sellers’ market.”
Investment Opportunities and Market Trends
Dutch Mendenhall, the best-selling author of “Money Shackles” and the founder of RADD Companies, offered a broader perspective on the market landscape.
“Experts predict that by the end of [fall], the housing market will experience a mixed landscape influenced by various economic factors,” said Mendenhall.
“… continued interest rate hikes are likely to cool down the red-hot market seen in previous years, leading to slower home price growth and potentially more balanced conditions between buyers and sellers.”
He added, “Regional variations will be significant, with some areas still experiencing strong demand due to population growth and limited housing supply.”
According to Mendenhall, real estate investment opportunities will remain attractive, particularly in fractional ownership and alternative investing, especially as traditional market segments stabilize.
Sustainability and Energy Efficiency
Lastly, Mendenhall highlighted an emerging trend in the housing market.
He said, “Experts anticipate that the increased focus on sustainable and energy-efficient homes could drive a niche market within the broader housing sector.”
If you’re in the market for your next house, it couldn’t hurt to look for smart homes filled with Earth-friendly tech.
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This article originally appeared on GOBankingRates.com: What the Housing Market Will Look Like by the End of Fall 2024, According to Experts