6 Data-Backed Real Estate Predictions for 2024

2024 brings a mixed bag of real estate predictions, and as a potential homebuyer or seller, it's crucial to stay informed.   Affordability remains the main concern as homebuyers look at ways to keep their mortgage payments down through house hacking and buying fixers.  According to Zillow, here's a concise breakdown of what to expect.
 

1. Inventory Improves in Specific Markets

  • Economists anticipate improvement in inventory, countering past shocks.

  • Life events are a driving force for moves.

  • Expect (slightly) more choices for buyers and increased sales volume.

2. Stabilization of Home Buying Costs

  • Affordability remains a concern, but Zillow predicts home values to hold steady with a minimal national decline.

  • Mortgage rates are expected to remain steady, potentially leading to a leveling off of home buying costs.  The Fed has signaled potential rate cuts later in the year.

  • Wage growth offers a silver lining, reducing the share of income spent on mortgages.

3. Opting Out in Expensive Markets

  • Affordability challenges may lead to delayed home purchases in expensive markets.

  • Single-family home rentals become attractive alternatives, meeting the demand for amenities and privacy.

  • Homeowners may become landlords, increasing the availability of single-family homes for rent.

4. The Rise of "House Hacking"

  • Millennials and Gen Z prioritize the opportunity to generate income from their homes.

  • "House hacking" gains popularity, with a significant percentage of younger buyers viewing rental income as crucial for homeownership dreams.

  • YouTube searches for "house hacking" hit a peak, reflecting the growing interest in this trend.

  • Check out my VIDEO on what "house hacking" is.  Be very aware of local regulations on short and long-term rentals before considering this strategy.  

  • Many cities don't allow ADUs for short-term rentals.

5. Competition for Fixer-Uppers

  • Limited inventory leads to a willingness to overlook flaws in homes.

  • Buyers seek sweat equity, competing with flippers for fixer-uppers.

  • Despite higher costs, the demand for these properties remains strong.

6. Downtown Rental Rebound

  • Suburban rents outpacing urban rents, but a rebound is expected in downtown areas.

  • Proximity to office hubs and post-pandemic amenities drive rental demand in urban markets.

  • A surge in multifamily construction in 2023 provides renters with more options and potential concessions from landlords.