The housing market hasn’t been easy to navigate in the last few years, with high mortgage rates and inflation making the average homeowner feel weary. But things are starting to look up—if slowly—across the market, according to Zillow’s 2024 Housing Market Predictions.
The online real estate marketplace says the new year will see more homes put up for sale, plateauing prices, and continued demand for single-family rentals—the latter due to a trend of households waiting to buy. Downtown areas might rise in demand, and house flippers may come into competition with first-time buyers looking for fixer uppers.
What to Expect From the 2024 Housing Market, According to Zillow
In October, the average percent of earnings spent on mortgage payments peaked at 40%, the highest-ever level recorded by Zillow since the platform started compiling data in the ’90s. Many homeowners are waiting for interest rates to drop before moving into a new house, but the market’s stagnancy may result in an increase of homes put up for sale. This means you can expect more options at various price points if you’re a buyer (though a majority will still be on the expensive side).
Houses may get slightly more affordable, with prices plateauing—dropping by a slight 0.2% in value in 2024. According to Zillow, mortgage rates are more difficult to predict now. But looking at inflation trends gives reason for hope: The slow market, stagnant prices, and steady mortgage rates (referred to as “higher for longer” by the home-buying industry) allow shoppers to take their time to build up their savings.
Even so, prohibitively high housing prices continue to make the single-family rental market thrive. Young families are hunting for leases that provide privacy and a backyard without the long-term commitment and additional costs. The age of median renters has risen, as younger buyers struggle to put together a down payment or keep up with mortgage prices.
For buyers making the jump to homeownership, fixer-uppers are becoming more appealing with their lower inventory and higher costs. Where buyers could once be picky about perfectly-maintained kitchens and updated bathrooms, they’re now deciding that outdated appliances are a small price to pay. While that opens up a new side of the market for some, it makes things more competitive for those only interested in flipping homes.
Buyers are willing to forfeit some wants to upgrade to larger homes for growing families or expanding their work-at-home space. These buyers tend to add sensory gardens or brutalist design on their wishlists, rather than cloffices or Tuscan kitchens.
Zillow also says artificial intelligence will continue to improve the home shopping experience for both buyers and sellers. With new tech tools to assist agents like virtual and 3D online home searches, the process is becoming more accessible (and relaxed).
Whether you’re looking to buy your first home, upgrade, or stick with renting for now, promising changes are occurring—you may just have to wait a bit longer for your dream home.
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