According to Nick Ron, the founder and CEO of House Buyers of America, it is expected that the average price of homes in the US will experience a modest increase of approximately 3-4% in the upcoming year. However, Ron also mentioned that there might be a slowdown in price appreciation at some point during the year. In his email comments shared with GOBankingRates, Ron attributed this potential slowdown to various factors including rising interest rates, an increase in the supply of homes, a decrease in demand, and affordability challenges for buyers. Despite these factors, Ron clarified that he does not anticipate a nationwide drop in prices.
The US housing market is experiencing some significant changes. According to data from Realtor.com, the number of homes actively for sale has decreased by 2% compared to last year. Additionally, there has been a 3.7% decrease in unsold homes and a 3.2% decrease in newly listed homes.
One of the factors influencing these changes is the national median list price, which dropped from $430,000 in September to $425,000 in October. This decrease can be attributed to the limited inventory available. Although there has been an increase in new home sales, it is not enough to meet the demand and address the low housing supply.
Looking ahead, Ron predicts that there will be an increase in the housing inventory next year. However, he also believes that the shortage will persist until 2030. These factors, along with rising construction costs and a slowing economy due to high interest rates, will undoubtedly impact the housing market in 2024.
Ron explained that due to the high demand for housing, it may take some time for builders to find suitable land, skilled labor, and materials to create the much-needed supply. However, he also mentioned that innovation in regulatory technology can help increase the supply of housing and make it easier to build new homes faster.
According to the Federal Reserve, as of November 9, the average 30-year fixed mortgage rate in the US was 7.50%. Although the pace of interest rate increase has slowed down, high rates are expected to last for a while.
Ron predicted that mortgage rates will be slightly lower in the first half of next year, but still elevated. As the economy decelerates, rates should go down. He also anticipated that the Federal Reserve will eventually start lowering rates in 2024 as inflation declines and unemployment increases. However, rates will still be high enough to pose affordability challenges for buyers and make sellers more reluctant to give up their low existing rates.
With the shortage in housing, Ron expected that 2024 will be a seller’s market, possibly leading to a shift in how people purchase homes.
Get ready to witness a surge in the number of buyers teaming up with their loved ones to buy homes. With intergenerational households, grown children returning to their parents’ homes, and families formed through friendships, more and more people are combining their incomes to secure homes and steer clear of the unpredictable rental market, according to his observations.
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