The nation’s leading real estate listings search portal is predicting improvements in inventory and affordability for 2024.
In a forecast released Thursday, Zillow predicted homebuyers will have slightly more homes to choose from at slightly more agreeable prices in the new year — but only by a small margin. Buying a home will remain expensive, but the market will begin to become gradually better for buyers in what Zillow economists called a “breather year.”
“I expect the beginning of a long healing process to kick off in the housing market next year,” Skylar Olsen, Zillow chief economist, said in the forecast. “We know there are a huge number of households in prime home-buying ages waiting for the winds to turn in their favor. While still presenting challenges, the market will be better for buyers, with more homes to choose from and improved affordability. Many will continue to look toward rentals, and given renter demographics, single-family rental demand in particular will be strong. Recent deliveries should keep rent growth down, and concessions high in that market, too. This is our breather year.”
Zillow predicted that more homes will hit the market during 2024 as more homeowners accept that high mortgage rates are sticking around and move forward with their plans to list their homes, even if it means losing their lower mortgage rate.
These predictions come as a separate report released this week by Realtor.com found that newly listed inventory increased annually by 7.5 percent during November — the first annual increase recorded since May 2022.
Zillow predicted that housing prices would more or less remain stable throughout 2024. Depending on which way mortgage rates trend during the year, that means there is a chance that affordability may improve somewhat for buyers. Recent inflation news suggests there is a good chance that mortgage rates will decrease throughout the coming months as well, the forecast notes.
Still, homes will remain very expensive, which is why Zillow predicted sustained demand in the rental space, especially for single-family rentals and rentals close to downtown areas. The forecast goes as far as to call the single-family rental the new starter home and predicted that rental prices will continue to increase throughout the year.