Is the Housing Market Turning?

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TRENDS, NEWS, FINANCE, HOMEBUYERS, HOME SELLERS

Is the Housing Market Turning?

The U.S. avoided a recession in 2023, and some say it will have a soft landing in 2024. Inflation has hovered in the 3% range for many months—higher than the central bank would prefer, but at 2.6% for personal consumption expenditures (PCE), it’s closer to the target range of 2% and far from the double-digit highs since the pandemic began. Most sources cite the “core” PCE, which excludes volatile energy and food prices which sat at 3.2% by year’s end—the lowest level since March 2021.

Meanwhile, existing home sales volume began to edge higher by the end of 2023, and prices rose 4.0% year over year to a median of $387,600. Mortgage interest rates ended the year at 6.61% for a benchmark 30-year fixed-rate conventional home loan. Existing housing inventory remains tight with approximately 3.5-months’ supply on hand at the current sales pace.

Due to the improvement in market conditions and higher consumer confidence, Realtor.com’s research finds that two factors will drive housing sales in 2024—relative affordability in the Midwest and Northeast and the 2023 dip in western home prices. Areas like Oxnard, Riverside, Bakersfield, San Diego, and Sacramento in California; Las Vegas, Nevada; Toledo, Ohio; and Springfield, Massachusetts could get double-digit sales growth in 2024. Toledo, for example, offers housing 51% below the national median with low unemployment.

These improvements should encourage more homebuyers to make the leap to homeownership. Ask your Berkshire Hathaway HomeServices network professional to update you on the latest market conditions in your area.

Location: San Diego, CA, USA

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