In 2023, we’ve seen high inflation and elevated home prices continue to define the real estate market. However, with interest rates on the way down and job growth starting to pick up, things seem to be trending in the right direction.
Whether you’re looking to purchase a single-family home, duplex, rental property, or commercial real estate investment, there are several factors to watch out for in the 2024 real estate market.
Interest Rate Trends
One of the most important factors to watch in 2024 are interest rate trends. Interest rates have a direct impact on the cost of borrowing and determine the price of homes buyers can afford in any given market.
Low interest rates make mortgage payments more affordable and allow buyers to purchase homes at a higher price point. On the flip side, high interest rates drive monthly mortgage payments up and price many potential buyers out of the market.
Market sentiment is another factor when it comes to interest rates. Low interest rates often create optimism in the market and encourage more buyers and investors to participate. However, high interest rates can create uncertainty and caution amongst potential homeowners and lead to a slowdown in real estate transactions.
Supply and Demand
Supply and demand are fundamental economic principles that have a significant impact on the real estate market as a whole.
The first effect of supply and demand is the price determination of housing. When the demand for real estate exceeds the current supply of homes on the market, prices tend to rise. But when the home supply is greater than buyer demand, prices often fall.
Understanding supply and demand will allow you to decide when it’s the right time to buy or sell and to make informed decisions when it comes to real estate.
There are several economic indicators to watch for in the 2024 real estate market that could impact its performance.
First is GDP growth. Gross Domestic Product (GDP) is a fundamental measure of a country’s economic strength which affects the housing market. Increasing GDP means the economy is growing and may translate into higher demand for real estate. Rising GDP may also give people more disposable income to invest in real estate as homeowners or investors.
Job growth is another factor that’s tied in with the real estate market. Rising job growth means individuals and families are more likely to move to a new location or enter the housing market in their region. Additionally, growing employment also means more people will qualify for mortgages and have the ability to buy homes.
With so much uncertainty heading into 2024, there’s no accurate way to predict what’s ahead. However, positive signals showing interest rate decreases and softening inflation should instill some optimism in the minds of real estate investors and potential homeowners.
Are you looking for a real estate agent in Massapequa? The Kim Holland Homes team is the #1 real estate team on Long Island. Contact us or call Kim today at 516-236-6303 to start the process of finding your dream home.