As the real estate market undergoes shifts, the National Association of REALTORS® (NAR) projects a positive trajectory for existing-home sales in 2024. Despite a challenging year in 2023, where existing-home sales are expected to decline by 18%, experts anticipate a rebound in the real estate market. Lawrence Yun, NAR Chief Economist, shared insights at NAR’s Real Estate Forecast Summit, highlighting key projections for 2024.

Factors Influencing the Real Estate Market in 2024:

1. Decline in Mortgage Rates: Mortgage rates, having peaked and now on a downward trend from nearly 8%, are expected to improve housing affordability. NAR predicts the 30-year fixed-rate mortgage to average 6.3% in 2024, encouraging more home buyers to enter the market.
2. Sales Projections: NAR projects a 13.5% increase in existing-home sales and a 19% rise in new-home sales by the end of 2024. The real estate market is anticipated to recover, with improving affordability attracting potential buyers.
3. Markets to Watch: NAR evaluated 100 major U.S. metro areas to identify markets with strong housing demand. The following markets are expected to experience notable sales upticks in 2024:
   • Austin-Round Rock-Georgetown, Texas
   • Dallas-Fort Worth-Arlington, Texas
   • Dayton-Kettering, Ohio
   • Durham-Chapel Hill, N.C.
   • Harrisburg-Carlisle, Pa.
   • Houston-The Woodlands-Sugar Land, Texas
   • Nashville-Davidson–Murfreesboro–Franklin, Tenn.
   • Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
   • Portland-South Portland, Maine
   • Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.
4. Inflation as a Wild Card: The potential impact of inflation on long-term interest rates poses a challenge. Danielle Hale, chief economist at realtor.com®, emphasizes that inflation could affect real estate forecasts. If inflation persists, it may discourage homeowners from selling, exacerbating inventory shortages and affecting younger generations of home buyers.
5. Market Challenges: Despite positive projections, challenges persist, especially for first-time buyers. Low inventory remains a concern, with homeowners reluctant to sell. Homebuilders’ historical underproduction has led to a nationwide shortage of 5 million housing units, creating hurdles for buyers.
6. Homeowners’ Advantage: Current homeowners are poised to benefit from the market conditions. Rapid home appreciation has allowed owners to accumulate substantial housing wealth. Even in markets expecting slight dips, homeowners will likely weather the drop, with home price appreciation contributing to significant wealth accumulation.

While the 2024 housing market is anticipated to be challenging, the positive outlook suggests a rebound, emphasizing the role of declining mortgage rates and improved affordability in driving sales growth. The impact of inflation remains a critical factor to monitor in shaping the future landscape of the real estate market.