A Look At The Current Real Estate Market (2024)

Trends vary by region

There’s optimism across the board for the U.S. housing market but some regions can expect more pent-up demand than others in 2024.

Midwest

Existing-home sales in the Midwest fell 8.7% year-over-year in November 2023, according to NAR. However, on a month-to-month basis (from October to November), the region showed a 1.1% increase in existing-home sales.

The typical home in the Midwest sold for $280,800 in November 2023, a 4.9% annual increase. Despite this jump, the Midwest remains the most affordable region of the country for home buyers. Bright MLS notes that “home prices have been rising more in line with incomes” in metro areas in the Midwest.

South

While all regions of the country recorded a yearly decline in existing-home sales in November 2023, the South fared best with only a 4.3% drop. From October to November, home sales rose by 4.7% as mortgage rates came down from their peak. Impressively, the region had the biggest share of home sales nationwide in November, making up 46.3% of the total.

The median sales price of an existing home grew 3.4% year-over-year in November 2023, reaching $351,500. The South is the second-most affordable region for home buyers after the Midwest.

Northeast

Existing-home sales fell 13% between November 2022 and November 2023 in the Northeast — the biggest decline of any region in the country. From October to November, sales dwindled by 2.1%. The median sales price of an existing home increased by 4.8% year-over-year to $428,600. The region also had the smallest share of nationwide home sales in November at 12.3%. In its 2024 National Housing Market Outlook, Bright MLS forecasts that a handful of metro areas in the Northeast will face home price declines this year.

West

Existing-home sales in the West decreased 8.6% in November from a year prior. From November 2022 to November 2023, the West recorded a 7.2% decline in sales, the biggest month-over-month change of any region.

The West posted the largest annual increase in median existing-home prices at 5.3% in November 2023. The typical home in the region sold for $603,200 during the same period. Markets in the West, particularly California, dominate Bright MLS’s list of metros with anticipated price declines in 2024, among them San Diego, California, Las Vegas, Nevada, Riverside, California, and Los Angeles, California.

Economic indicators affecting the 2024 real estate market

The housing market is, of course, only one piece of an ever-changing economic landscape, and its contours depend on adjacent pieces — intertwined factors like inflation, the savings rate, and the risk of a recession.

Let’s take a look at these indicators to understand how they are shaping the current real estate market.

Inflation

Inflation is a measure of how prices change over time for goods and services people purchase. A certain level of inflation is expected and even healthy in a given year. (The Federal Reserve aims for 2% per year.)

The Consumer Price Index (CPI) is used to evaluate inflation and takes into account the prices of typical goods and services like gas and groceries. After cooling for much of 2023, the CPI rose 0.3% in December, resulting in an annual gain of 3.4%.

The main reason for the increase was higher shelter costs (rent, hotel lodging, etc.); these costs went up by 0.5% and were responsible for over half of the overall rise in the Consumer Price Index.

Morningstar, a Chicago-based financial services firm, predicts that inflation will “return to normal levels [in 2024], in line with the Federal Reserve’s 2% inflation target.” The firm anticipates a soft landing with inflation hovering around 1.9% from 2024 to 2028. Inflation can affect the housing market in many ways, putting pressure on home prices, home values, mortgage rates, construction costs, and more.

Depleted savings

During the pandemic, Americans managed to save approximately $2.1 trillion as household spending decreased and the government provided stimulus checks and tax breaks. These savings helped fuel the pandemic housing boom, contributing to down payments and closing costs.

The personal savings rate, or the percentage of disposable income that people save rather than spend, hit 4.1% in November 2023, according to the St. Louis Fed. This is significantly lower than the average rate of 8.9% seen over the past several decades.

Elevated interest rates and inflation are making it tougher for Americans to put away money each month and increasing home prices are making it more challenging to enter the market as a first-time home buyer or upgrade from a starter home. According to ATTOM’s fourth-quarter 2023 U.S. Home Affordability Report, home prices are outpacing wages in 50.7% of the 580 counties analyzed, putting home ownership further out of reach for many Americans.

Risk of a recession

Will the U.S. economy stick a soft landing or tumble into a recession in 2024? Only 24% of economists surveyed by the National Association for Business Economics (NABE) believe a recession is likely in 2024. If job growth and consumer spending remain solid, and inflation continues to improve, the economy could avoid recession once again in 2024.

Bringing down inflation without triggering a recession is a tough feat, though, so there’s still some risk of a downturn. If a recession were to occur, job losses and a reduction in consumer spending could lead to less demand for housing. But again, more than three-fourths of the economists surveyed by NABE pegged the chances of a 2024 recession as 50% or less.

What should you do?

As we’ve seen, the 2024 real estate market shows promising signs of a rebound. Mortgage rates, inventory, and home sales are all expected to improve, and home prices should stabilize throughout the year. If you’re thinking of throwing your hat into the ring — whether as a buyer, a seller, or both — here are some tips to you navigate the current real estate market.

Connect with a Top Agent

Regardless of market conditions and whether you’re buying or selling a home, working with a top real estate agent can be key to achieving your goals.

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Tips for home buyers in 2024

• If you have flexibility, expand your search area to more affordable regions. Try this tool from NAR to learn more about affordability in a specific state or metropolitan area.
• In this market of low inventory, press pause on your search for a turnkey home and embrace a fixer-upper. According to our Top Agents Insights Report, 75% of agents today say they’re encouraging buyers to consider properties in need of minor upgrades.
• Keep an eye on mortgage rates as they’re expected to sink to 6.1%-6.6% by the end of 2024. Tip: Freddie Mac releases weekly reports on where mortgage rates currently stand, and highlights weekly and yearly changes.
• Ask your real estate agent about pocket listings or de-listed properties. HomeLight’s Top Agents Insights Report found that 44% of agents are leveraging connections for off-market or pocket listing deals to navigate the challenge of low inventory for buyers. If a property sat on the market for several months before the listing expired or was removed, you might be able to score a deal if the homeowner is still interested in selling.
• To get a lower interest rate — especially if you’re planning to stay in the home for less than five years or so — consider an adjustable-rate mortgage (ARM). While ARMs have higher lending standards, they come with lower introductory rates than fixed-rate mortgages and are typically locked in for a period of five to 10 years. After that, the interest rate will fluctuate.
• If you live in Arizona, California, Colorado, Florida, or Texas, check out our HomeLight Cash Offer program. If you find yourself in a competitive local market, HomeLight can make an all-cash offer on your behalf, giving you an advantage over other buyers and speeding up the closing process.
• If you plan to buy and sell a home this year, HomeLight’s Buy Before You Sell program can help you unlock your equity to make a strong offer on a new home before selling your current home. You’ll be able to move on your schedule and list your home vacant — it’s a win-win.

Tips for home sellers in 2024

• Work with a top agent to guide you along the way. We’d love to connect you to someone with a track record of satisfied clients. Our service is completely free, and in two minutes, we’ll recommend the best agents near you.
• Have your home professionally staged to sell for up to 13% more than an unstaged home. According to our Top Agent Insights Report, 67% of agents believe staging can help sell a home, and 31% consider it essential for a sale. A thoroughly cleaned, decluttered home with even minimal staging gives buyers the sense that the home is well cared for.
• Make high-ROI improvements before you list your home to make it more attractive to potential buyers. Modernized bathrooms and kitchens, outdoor improvements, and finished basements or attics are the top upgrades sellers can add to their homes, according to our agent survey.
• Work with your agent to set a competitive list price for your home. Our survey indicates that overpriced homes and lack of concessions are the top deal-breakers for buyers in the current real estate market. To get an idea of what your home is worth, check out HomeLight’s free home value estimate.
• If you’d rather not go through the work of listing your house, consider requesting a cash offer from HomeLight’s Simple Sale platform, which provides cash offers for homes in almost any condition across the nation. You can skip repairs, staging, and showings. Instead, tell us a bit about your home and your selling timeline, and we’ll send over a cash offer in as few as 48 hours. With Simple Sale, you can also compare your offer to an estimation of what you’d fetch on the open market.

Writer Hayley Abernathy contributed to this article.

Header Image Source: (Chris Norberg / Unsplash)