A Glimpse into the Future: NAR Chief Economist Forecasts a Promising 2024 Real Estate Landscape
The National Association of Realtors (NAR) Chief Economist, Lawrence Yun, recently unveiled a positive outlook for the real estate market in 2024. According to Yun's projections, 4.71 million existing homes are expected to be sold, with Austin, Texas emerging as the top real estate market to watch in the coming year and beyond. This forecast was presented during NAR's fifth annual year-end Real Estate Forecast Summit: The Year Ahead.
Yun anticipates a robust growth trajectory for the housing market, with a forecasted 13.5% increase in home sales compared to 2023. The median home price is predicted to reach $389,500, reflecting a 0.9% uptick from the previous year.
The Chief Economist highlighted the Southern states' metro markets as potential outperformers due to faster job growth, while the Midwest is expected to experience gains as the most affordable region in the nation.
In a positive trend for renters, Yun predicts a further stabilization of rent prices in 2024, contributing to the moderation of the consumer price index. Additionally, foreclosure rates are expected to remain historically low, constituting less than 1% of all mortgages.
Looking at the broader economic landscape, Yun foresees a 1.5% growth in the U.S. GDP, successfully avoiding a recession. Net new job additions are projected to slow down to 1.7 million in 2024, a decrease from 2.7 million in 2023 and 4.8 million in 2022. After reaching over 8% in late 2023, the 30-year fixed mortgage rate is expected to average 6.3%. Yun also anticipates the Federal Reserve to make four rate cuts, addressing inflationary concerns in response to a deceleration in economic activity.
In terms of new construction, Yun forecasts 1.48 million housing starts in 2024, comprising 1.04 million single-family homes and 440,000 multifamily units.
Top 10 Real Estate Markets with the Most Pent-Up Housing Demand in 2024
NAR has identified the top 10 real estate markets with the most pent-up housing demand in 2024, which are expected to outperform other metro areas. The list includes:
- Austin-Round Rock-Georgetown, Texas
- Dallas-Fort Worth-Arlington, Texas
- Dayton-Kettering, Ohio
- Durham-Chapel Hill, North Carolina
- Harrisburg-Carlisle, Pennsylvania
- Houston-The Woodlands-Sugar Land, Texas
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee
- Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
- Portland-South Portland, Maine
- Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia
Yun expressed optimism about the housing market's recovery, attributing it to falling mortgage rates, rising income, and a projected 30% increase in housing inventory as more sellers list their properties after a two-year delay. These selected top 10 U.S. markets are expected to lead the way in a faster recovery of home sales.
Source: NAR
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