Housing Market Heats Up: NAR Forecasts 13.5% Surge In Home Sales For 2024

As economic conditions continue to stabilize, residential real estate experts are optimistic that the housing sector is poised for a significant expansion in 2024.

The National Association of Realtors (NAR) predicts that 4.71 million existing homes will be sold next year, up 13.5% from 4.1 million in 2023, according to the organization’s fifth annual year-end Real Estate Forecast Summit: The Year Ahead.

The median home price is expected to increase 0.9% to $389,500.

"Metro markets in Southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region," NAR Chief Economist Lawrence Yun said.

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NAR identified the top 10 markets with the most pent-up housing demand, which are expected to outperform other metro areas in 2024. They are:

1. Austin-Round Rock-Georgetown, Texas

2. Dallas-Fort Worth-Arlington, Texas

3. Dayton-Kettering, Ohio

4. Durham-Chapel Hill, North Carolina

5. Harrisburg-Carlisle, Pennsylvania

6. Houston-The Woodlands-Sugar Land, Texas

7. Nashville-Davidson-Murfreesboro-Franklin, Tennessee

8. Philadelphia-Camden, Wilmington, Pennsylvania-New Jersey-Delaware-Maryland

9. Portland-South Portland, Maine

10. Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia

NAR based its selection of the top 10 housing markets with the most pent-up demand on indicators such as lower home price appreciation, more renters who can afford to buy the median-priced home, more potential sellers, a decline in remote workers and more affordable listings for first-time buyers. It also looked at job and income growth and which areas had the most high-earner millennial renters moving in.

"The demand for housing will recover from falling mortgage rates and rising income," Yun said. "In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years. The selected top 10 U.S. markets will experience faster recovery in home sales."

Yun expects the 30-year fixed mortgage rate to average 6.3% after being more than 8% in 2023 and that the Federal Reserve will cut rates four times. He also foresees 1.48 million housing starts, including 1.04 single-family homes and 440,000 multifamily units.

Yun predicts that the U.S. gross domestic product will grow by 1.5% in 2024, avoiding a recession, with net new job additions slowing to 1.7 million compared to 2.7 million in 2023 and 4.8 million in 2022.

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