4 Real Estate Predictions for 2024

1. Home prices expected to increase

Mason Virant, associate director of the Washington Center for Real Estate Research at the University of Washington, expects home prices to increase 1% to 2% statewide and 1.5% to 3% in pricier areas like Seattle and Bellevue in 2024 compared with 2023. Matthew Gardner, former chief economist at Windermere, predicts that the price of single-family homes for sale in King County will rise about 3% in 2024. The median home price in King County so far this year is down about 2% from the same time frame last year.

 

2. Mortgage rates may drop slightly

Economists at Fannie Mae, the National Association of Realtors, and Redfin say they expect mortgage rates to stay above 6% in 2024. Fannie Mae projects the rate on a 30-year fixed mortgage will average 6.7% in 2024 and 6.2% in 2025, as the Fed continues to try to fight inflation.

 

 

3. More homes for sale, but not many

Many homeowners have a low interest rate because they bought in recent years or they refinanced. In that situation, they have little incentive to sell and buy a new home at a higher rate unless absolutely necessary. Without those homes for sale, buyers have less to choose from and that limited inventory keeps the prices from falling.

 

4. Apartment rents to increase

With fewer new apartments hitting the market in the coming years, rents are likely to start climbing again. CoStar projects apartment rents in the Seattle area will increase about 4% next year. This is higher than the average of about 2.5% per year over the past two decades.

 

With all this being said, there are paths to homeownership. Don’t let the headlines scare you. Affordability is and will be an issue for the foreseeable future, and understanding the truths doesn’t make it easier for people to buy homes. But what we can say is that being an advocate for our buyers and sellers in an economy like this is hugely important.