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Last year, the housing market slowed down because fewer folks were buying or selling homes. This happened because the Federal Reserve increased interest rates in 2022, making it more expensive to borrow money for homes. Plus, home prices were crazy high, which made things even harder for buyers.

A lot of people who wanted to buy homes couldn’t afford it, and those who owned homes didn’t want to give up their lower mortgage rates from the pandemic time. So, fewer homes were available for sale.

But, hey, some good news might be around the corner! In December, the Federal Reserve hinted they might stop increasing rates and could even lower them by 0.75% this year. This could mean cheaper home loans soon. When mortgage rates go down, it usually gets people more interested in buying homes.

What It Means for Buyers and Sellers

Home Prices Expected to Stay Steady

Even though mortgage rates were expected to go way up, home prices in 2023 didn’t drop like some thought they would. Instead, they went up a bit in some places and down in others (areas of Portland did see a slight year-over-year drop of ~1.5%). This happened because there aren’t enough homes available for how many people want to buy them.

Experts think this balance between fewer homes to buy and lots of people wanting them will keep prices fairly steady in 2024. Some say prices might drop a tiny bit, while others think they might go up a bit.

Lower Mortgage Rates Coming Up

The good news for this year is that the crazy high mortgage rates might finally start going down. The Fed’s plan might bring rates down to about 6%, which is better than the super-high 8% rates we’ve seen.

But don’t expect the really low rates of around 3% to come back. Experts say higher rates are sticking around as long as the economy keeps doing well.

More Buyers and Sellers Expected

Because rates might get lower, more people might decide to buy homes again. And sellers who’ve been waiting might start selling, too. This could mean more homes on the market and more people buying and selling.

But remember, there’s still a shortage of homes available. Some experts think more sellers will put their homes up for sale, but others predict that we might have even fewer homes to pick from.

Supply Shortage Persists

Will there be more homes to choose from this year? Some experts think so. They believe more sellers will finally start selling their homes, which could mean more choices for buyers. However, others think the number of homes available might drop even more this year.

The real challenge is that there aren’t enough new homes being built to meet demand. This means there’s still a shortage of about one million homes. We need more people selling their homes to balance things out.

Advice and Guidance

While big forecasts are cool, real estate is all about your local area. As a local expert, I’m here to help you figure out what’s happening in your neighborhood’s real estate scene. If you’re thinking about buying or selling a home this year, we’re here to chat and plan with you.

Disclaimer: Remember, the info we shared is for general understanding and not financial advice. Always speak with pros who know your situation for the nitty-gritty stuff.

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