Real Estate Market Forecast for 2024: Home Prices Expected to Drop

The real estate market in the United States could be in for a significant shift in 2024, according to a new report from Realtor.com. After two years of surging home prices and mortgage rates, the firm predicts that home prices will fall by 1.7% overall next year, with larger drops expected in 21 of the country’s largest metro areas.

Some of the steepest declines are anticipated in cities like Austin, Texas, where a 12.2% drop is expected, as well as St. Louis, Missouri, and Spokane, Washington. The National Association of Realtors reported that the median price of a home in America reached $410,200 in June, the second-highest recorded in 24 years, before dropping to $379,100 in October.

The shift in housing affordability may encourage first-time buyers to enter the market, but high mortgage rates could deter some current homeowners from moving. Zillow also predicts that homeowners who purchased when rates were at all-time lows may put their homes up for sale in 2024.

Despite the potential stabilization of the market next year, challenges such as low home sales, limited inventory, and a scarcity of move-in ready homes in desirable areas are still expected. However, experts like Realtor.com’s chief economist Danielle Hale and NAR’s chief economist Lawrence Yun believe that 2024 will be a step in the right direction for the housing market, with interest rates expected to fall between 6% and 7% by the spring.