{"id":163544,"date":"2023-12-20T10:47:26","date_gmt":"2023-12-20T17:47:26","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=163544"},"modified":"2023-12-29T01:59:29","modified_gmt":"2023-12-29T08:59:29","slug":"why-real-estate-looks-bright-in-2024","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/why-real-estate-looks-bright-in-2024","title":{"rendered":"Here\u2019s Why the Future of Real Estate Looks Bright In 2024"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC9159511677\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><em>This article is presented by Connect Invest. Read our&nbsp;<a href=\"https:\/\/www.biggerpockets.com\/blog\/editorial-blog-guidelines\" target=\"_blank\" rel=\"noreferrer noopener\">editorial guidelines<\/a>&nbsp;for more information.<\/em><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We&#8217;re heading into the new year, and the 2024 real estate forecast looks bright. With this promising prediction in mind, here is some in-depth analysis that will unveil the key trends and factors contributing to the positive outlook. If you&#8217;re navigating or learning to navigate the evolving landscape of real estate investment and homeownership, join us as we provide the strategic insights you&#8217;ll need on your journey.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Navigating the Evolving Real Estate Landscape<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">In recent years, the housing market has experienced a tumultuous ride, characterized by fluctuations that sparked extensive discussions about the future landscape of the real estate market. Increased inflation and fierce competition to buy a home in a lower-than-average inventory market were hot topics. Offers significantly higher than asking prices and buyers taking risks such as forgoing inspections left investors concerned.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In a bid to combat inflation, the Federal Reserve increased interest rates, triggering a ripple effect. This adjustment posed challenges for buyers grappling with affordability while sellers deliberated on parting with favorable pandemic-era interest rates in exchange for higher ones.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The uncertainty extended beyond buyers and sellers navigating these uncharted waters, casting a shadow of pessimism over brokers and agents, who had to contemplate the sustainability of real estate as a viable career choice.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">All that said, the positive real estate outlook for 2024 should alleviate concerns. Declining mortgage rates will be a boon to the market, and after hitting last year&#8217;s high in October, the average 30-year fixed rate has fallen by half a percent. This is the welcome holiday gift that investors have been waiting for.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Industry Experts Anticipate a Favorable Turn<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The National Association of Home Builders anticipates that single-family housing starts will rise&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nahb.org\/news-and-economics\/press-releases\/2023\/11\/builder-sentiment-down-again-but-better-building-conditions-are-in-view\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">by 5% in 2024<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;as steady interest rates combat inflation. In 2024, single-family production should&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nahb.org\/news-and-economics\/press-releases\/2023\/01\/housing-downturn-in-2023-followed-by-recovery-in-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rise to 925,000 units<\/span><\/a><span data-preserver-spaces=\"true\">, up from 744,000 units in 2023.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">More good news followed last month when Zillow released its&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/2024-housing-predictions-33447\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2024 real estate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;forecast, and the outlook from their economists is optimistic. Homebuying options will broaden a bit, and there will be more wiggle room in affordability.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Zillow experts predict that:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Homeowners anticipating a return to the historically low interest rates of 2021 will come to the realization that the market has shifted, prompting them to list their homes for sale.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Home values are expected to remain stable, and considering inflation forecasts, current interest rates are also anticipated to remain steady for the next few months.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Modern families are opting to rent for more extended periods compared to past generations. Instead of the traditional approach of selling and buying a new home, current homeowners are capitalizing on this trend by choosing to rent while simultaneously acquiring another property.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">There will continue to be increased demand for rental properties within easy commuting distance to downtown hubs.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Traditional homebuyers and home flippers might find themselves competing for the same properties.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Brokerage firm Redfin echoed Zillow&#8217;s optimism and released its own&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/housing-market-predictions-2024\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2024 real estate forecast<\/span><\/a><span data-preserver-spaces=\"true\">, which included:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Concluding 2023 with a 3% year-over-year increase in median home prices, the outlook for 2024 anticipates a modest decline of 1%.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">A surplus in housing supply compared to demand will contribute to a potential decline in property prices.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">In 2024, there will be 4.3 million home sales, a 5% increase from 2023. The sales momentum will be steady throughout the year.&nbsp;<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">A consistent trend of decreasing mortgage rates; however, it&#8217;s unlikely for them to fall below the 6% threshold.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Sellers will continue to become more informed about hiring an agent and will be increasingly proactive about negotiating commissions with them.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">The American Dream continues to be redefined as young families perceive homeownership to be increasingly unattainable. Renting has lost its negative stigma, with these families and individuals looking to invest their money in alternative avenues beyond homeownership. This shift indicates a rise in demand for rental properties.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Mortgage Rates Drop, Expected to Stabilize<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Despite the encouraging developments in housing supply and demand, a critical factor remains: mortgage rates. How are they expected to perform in the real estate landscape of 2024?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Mortgage rates have been hovering near 7%. The Financial National Mortgage Association, also known as Fannie Mae, predicts that the average mortgage rate will&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.fanniemae.com\/research-and-insights\/forecast\/economic-developments-november-2023#economic-forecast-changes\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">be at 7.3% in 2024 and 6.9% in 2025<\/span><\/a><span data-preserver-spaces=\"true\">, which may mean more buyers will come on the scene in late 2024 and early 2025. Declining unemployment and strong job growth will also help to position people as buyers or investors in&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.connectinvest.com\/resources\/blogs\/what-you-need-to-know-about-real-estate-debt-investing\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">real estate debt investing<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.mba.org\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Mortgage Bankers Association<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;noted that there was a decrease in the average contract interest rate from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2023\/12\/06\/mortgage-refinance-demand-jumps-as-rates-fall.html#:~:text=Last%20week%2C%20the%20average%20contract,to%20the%20Mortgage%20Bankers%20Association\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">7.37% to 7.17% for 30-year fixed-rate mortgages<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;with conforming loan balances ($726,200 or less). Points dropped from 0.64 to 0.60 (including the origination fee) for loans with a 20% down payment. This level has yet to be seen since August.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As a result, there was a 14% increase in applications to refinance home loans\u201410% higher than the same week one year ago. These are positive indications for the real estate market in 2024.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Home Inventory Shows a Renewed Pulse<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">It&#8217;s easy to take just a few minutes and discover report after report of how difficult it was to buy a home in 2023. Low inventory resulted in cutthroat competition and exaggerated prices. However, that should change in the coming year.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">A Realtor.com&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/research\/november-2023-data\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">report<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;showed that 7.5% more home sellers listed their homes in November 2023 compared to November 2022. This was the first time there has been an annual increase in the rate of newly listed homes since May 2022.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">An increase in listed homes in November is also a good omen for 2024. Traditionally, homebuyers avoid big moves and purchases during November and December because of the holiday season. People&#8217;s willingness to engage in real estate transactions may not be the beginning of a trend, but it certainly demonstrates that positive things are on the horizon for the real estate market in 2024.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Increasing Buyer Motivation and Confidence Amid Challenging Conditions<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">In 2021, when interest rates were at record lows, many buyers ended up sitting on the sidelines, unwilling or unable to foray into intense competition where checks were written for well over asking prices and sensible processes, like inspections, were declined. Now that that frenzy has subsided, inventory is increasing, and interest rates are slightly declining, buyers are becoming more motivated and confident.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There is no perfect time to buy a home, but some conditions are more favorable than others, and the real estate outlook for 2024 will present some solid opportunities to dive into real estate.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">International interest in the U.S. real estate market may be a significant factor in the outlook for 2024. A significant number of respondents to the Coldwell Banker&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/blog.coldwellbanker.com\/wp-content\/uploads\/2023\/03\/01152844\/Coldwell-Banker-Global-Luxury-2023-International-Consumer-Survey.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2023 International Consumer Survey<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;indicated that they were optimistic about the real estate market in the U.S. Indeed, 80% of the luxury consumers surveyed expressed a belief that real estate remains a safe, solid investment, and 76% said that the market conditions for purchasing a home were &#8220;excellent&#8221; and\/or &#8220;good.&#8221;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Americans Back Zoning Changes for Increased Housing<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Historically, American housing policies and zoning laws have stymied new development. But the winds of change are blowing, and support from the public to change policies is building.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">A recent poll by&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewtrusts.org\/en\/research-and-analysis\/articles\/2023\/11\/30\/survey-finds-large-majorities-favor-policies-to-enable-more-housing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pew Charitable Trust<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;shows that the public approves of changes that will result in more&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/institutional-investors-are-buying-affordable-housing-in-droves\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">affordable housing<\/span><\/a><span data-preserver-spaces=\"true\">, particularly apartments. Other poll results indicated:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">A favorable response to expedited permitting processes.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Approval for more housing in&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/commercial-real-estate-fundamentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">commercial<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;areas.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">A willingness to see more small homes being built and for them to be closer together.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">With a favorable outlook for real estate in 2024, investors are expected to actively participate in the market.&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/is-real-estate-still-a-reliable-inflation-proof-investment-heading-into-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Real estate remains a safe investment<\/span><\/a><span data-preserver-spaces=\"true\">, and the challenges of the pandemic era seem to be fading away. If you&#8217;ve been contemplating a new home purchase or investing in real estate projects through investment firms, 2024 promises more housing, new developments, better affordability, declining interest rates, and solid investment opportunities.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here&#8217;s to a brighter future in the real estate market in 2024.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('DoorLoop Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/why-real-estate-looks-bright-in-2024',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"wp-block-heading has-text-align-left mt-0\"><strong>This article is presented by Connect Invest<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"66\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-1024x66.png\" alt=\"\" class=\"wp-image-159085\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-1024x66.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-300x19.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-768x49.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-1536x99.png 1536w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/09\/Connect_Invest_Logotype_Green-2048x132.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>Your connection to private real estate investing<\/strong>.<\/p>\n\n\n\n<p>Connect Invest is an online investing platform that provides opportunities for short-term investments. These investments contribute to a diverse portfolio of real estate projects, encompassing both commercial and residential developments at various stages.<\/p>\n\n\n\n<div id=button-custom-event-block_63c9a33918e17 class='button-custom-event'>\n      <a href=\"https:\/\/www.connectinvest.com\/?utm_campaign=Bigger%20Pockets%20Launch&#038;utm_source=biggerpockets&#038;utm_medium=referral&#038;utm_content=blog\" x-on:click=\"window.analytics.track(&#039;Sponsored Blog CTA Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/why-real-estate-looks-bright-in-2024&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn More About Connect Invest<\/a>\n  <\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>After a rocky year, some say we can now see the light at the end of the tunnel. Here&#8217;s why the future looks great for investors.<\/p>\n","protected":false},"author":613702,"featured_media":163547,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119,4433],"tags":[],"class_list":["post-163544","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily","category-opinion"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/163544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613702"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=163544"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/163544\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/163547"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=163544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=163544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=163544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}