Realtor.com has updated its forecasts for both supply and home price growth, with for-sale supply seeing the largest adjustment.
The site’s initial 2024 forecast called for a 14% drop in for-sale inventory, but has now amended that figure to an increase of 14.5%. Its economists noted that its newest estimates take into account a pair of “somewhat unanticipated” developments that took place in the spring.
For one, some sellers who postponed their decision to list last year were finally spurred to do so because of better-than-expected mortgage rates to begin 2024. And secondly, sellers who have put their home for sale have exhibited more patience than expected, with many choosing to wait out the market for a buyer rather than delisting outright. Their choices have led to more properties staying on the market longer and listings accumulating on the market at a higher-than-expected rate.
“During the first half of this year, we have seen home buyers continue to remain sensitive to mortgage rates, and while home sellers are also affected, the binds of the mortgage rate lock-in effect appear to be loosening for some homeowners,” said Danielle Hale, Realtor.com’s chief economist. “These trends mean that home sales in 2024 will eke out only a small gain over 2023, but homebuyers have a fair amount to look forward to in the latter part of the year.
“Mortgage rates have finally begun to ease, and this trend is expected to continue as improving inflation enables the Fed to relax its tight policy, boosting homebuyer purchasing power. Furthermore, gains in the number of homes for sale mean that buyers have more negotiating power than they have had in recent years which should help buyers and sellers find the middle ground necessary for more sales. Fall has historically been a shoulder season for the housing market that benefits flexible buyers, and this year is setting up to be even more advantageous.”
Unfortunately for buyers, despite rising inventory, home prices have also continued to rise. Realtor.com now projects 2024 to end with a home price uptick of 4.6%, a stark reversal of its initial forecast of a 1.7% price decline. While inventory is improving, widespread undersupply still remains the chief driver of home prices, with many of the country’s largest housing markets still deeply competitive. According to Realtor.com’s most recent Housing Market Trends report, just 12 of the 50 largest markets tracked by the site have seen their inventory rebound back to or above their pre-pandemic supply levels.
