In 2023, homebuyers were largely met with tight inventory, surging interest rates, and record-high prices.
But, according to experts, 2024 may be turning over a new – and better – leaf.
"The worst in home sales is over. The worst in housing affordability is over. This year will be a year of home sales recovery," Lawrence Yun, chief economist at the National Association of Realtors, told FOX Television Stations.
Interest rates in 2024
"Christmas really did come early this year," Frances Katzen, the founder of The Katzen Team at Douglas Elliman, told FOX. "Because when the 10-year Treasury yield dipped below 4%, we immediately saw the 30-year fix reduce all the way down to 6.5 from 8, and now we're seeing 10-year interest only at 5.8 to 5.5."
She added: "I think we’re going to see a very big movement back into ownership given how overpriced the rental market has been."
The average 30-year fixed-rate mortgage was 6.61% for the week ending Dec. 28, according to Freddie Mac's latest Primary Mortgage Market Survey.
Yun predicted interest rates could fall to around 6.3% by 2024’s end but said it’s "very doubtful" to go under 6% for a prolonged period.
Real estate forecast
So, does this mean 2024 may finally be a good year to buy a home?
"It could be," Katzen said, adding, "I think as soon as there's too much rate adjustment, we're going to see a soaring of pricing. I think right now is that beautiful sweet spot to go in where you get a little bit more for your money. Remember, you can always refinance the rate; you can't change your purchase price."
A "for sale by owner" sign stands outside a home in LaSalle, Illinois, U.S., on Friday, June 7, 2013. (Credit: Daniel Acker/Bloomberg via Getty Images)
While many experts agree that 2024 will not be another 2021 or 2022-type real estate market, the competition for housing may start to increase as rates drop and more buyers return to the market, putting pressure on affordability.
"The timing of when is the best time is less pertinent from a long-term perspective since mortgages can always be refinanced if the rates were to fall much more than initially anticipated. Home prices over the long haul have proven to provide a good return," Yun continued.
Katzen added, "I think that the real estate market is going to outperform expectation, and I think what we're going to see is that people who've been sidelined trying to time it are going to end up feeling very sad that they didn't actually take action sooner. That's my gut."
This story was reported from Los Angeles.