Housing Market Forecast | 2024

Housing Market Forecast | 2024

We will be discussing the trends and predictions for the real estate market in the year.

As 2024 kicks off full time, many factors are influencing the housing market, including interest rates, economic indicators, and demographic shifts. I'll be diving into what experts are forecasting for the year ahead and how it may impact you whether as a home buyer or seller.

Whatever category you find yourself, a first-time homebuyer, a real estate investor, or simply curious about the future of the housing market, this report will provide valuable insights and information to help you make informed decisions. Let's dive into it:

What Will Happen With Home Prices This Year?

While we can't really forecast the future, we can use as it saw it's past share of twists and turns just as the housing market shifted.

Is it still a seller's market?

Well, because prices are driven by supply and demand and we still have a low supply of inventory in the market, this means there will be upward pressure on home prices. Already there are slight home price gains. Somewhat easing inventory, slightly increasing transactions volume. All in all things are looking up for home prices are expected to see small but steady increases every year through 2028.

And while the percent of appreciation may not be as high as it was in recent years, what’s important to focus on is that we’ll see prices rise, not fall, for at least the next 5 years with 2024 looking at about a 2.6% increase. If you were worried home prices are going to fall, this is a big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country Canada for years to come at a pace that’s more normal for the market.

With that in mind, bringing in these national insights as well as what’s happening in our Fraser Valley local market will help you see the bigger impact.

So, as a seller, selling your house appropriately so you can catch the eyes of serious buyers is important, especially in this mortgage rate environment. For buyers, with supply still tight, buyers will need to be flexible and willing to meet sellers halfway.

What Will Happen With Mortgage Rates This Year?

The past few years saw a lot of volatility in mortgage rates. Which leaves many wondering... what will happen with them in 2024? More than anything else, last year’s housing market was defined by high mortgage rates, reaching a 23-year high. But we’ve seen relief in the past few months as the recent Bank of Canada rate nouncements has made them flat e slowly trended down.

So, will mortgage rates continue to decline in 2024? No one can say for certain, but here’s what we know based historical trends. There’s a long-standing relationship between mortgage rates and inflation. Basically, when inflation is high, mortgage rates tend to follow suit.

Over the past year, inflation was up, so mortgage rates were as well. But inflation is easing now. And this is why the Bank of Canada has recently paused their rate hikes, which means many experts believe mortgage rates will continue their downward trend.

In fact, we’ve already started to see this decline in recent months. While the downward trend of both inflation and mortgage rates is promising, what you will have to brace for is that volatily is likely to continue going in 2024. Some ongoing variation is to be expected, but the anticipation is we’ll continue to see a downward trend this year.  

Will We See More Housing Inventory This Year?

Last year saw the lowest amount of homes sold in a decade. So, will we see activity pick up or are we in for another slower year? The strains on inventory due to rising homes prices as well as mortgage rates were felt nationwide this past year. Terms like “rate lock” and “affordability crisis” were prominent in headlines and articles about reasons why people had put their buying or selling plans on hold.

Are the days of tight housing supply behind us?

The short answer is no. While you may see headlines saying inventory is up, data also shows there are still signifcantly fewer homes for sale than there would usually be in a more normal market. However, what we’re seeing most is that this has become very hyper local. And while some cities in BC are seeing inventory declines, many are seeing the opposite: steady month over-month growth.

The market was no doubt thrown a lot of curveballs this year - namely high mortgage rates impacted by a wide variety of factors. However, as we start to see inflation cool and mortgage rates come down, it’s possible that prices will shoot up. Plus, it’s really not a matter of if but when we start to see that buyer and seller activity kick back up. So, the question becomes, what’s going to make an impact on those projections?

It all goes back to - you guessed it - mortgage rates.And although mortgage rates may remain volatile, their recent trend combined with what experts are saying indicate they could continue their downward trend in 2024. That would improve affordability for buyers and make it easier for sellers to move since they won’t feel as locked-in to their current, low mortgage rate.

Now that You Know what the market will look like in 2024, will you be willing to make the move?

Let's talk if you need some courage to take action!

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