2023 was a rough year for prospective homebuyers - but will 2024 be any different? Danielle Hale, chief economist at realtor.com, joined TheStreet’s J.D. Durkin to discuss what headwinds are facing those still looking to purchase a home. She also shares her advice for how to navigate the challenges of a still volatile real estate market.
Full Video Transcript Below:
J.D. DURKIN: How about some of the other big headwinds that you are forecasting for the overall real estate market in 2024?
DANIELLE HALE: Yeah so the big improvement is that affordability is going to start to improve. So that's, I think, a positive for buyers. But as far as a headwind, even though we're starting to see an improvement in affordability, it's still going to remain relatively expensive to buy a home. Mortgage rates are expected to come down and home prices are expected to fall a little bit nationwide. But in some markets, home prices may even increase. So it's really going to be market by market for home shoppers in the market next year. As far as whether or not they are going to see that improvement in affordability driven by price or whether it will be driven by mortgage rates declining alone. Another potential positive for home buyers is that incomes are expected to increase and with inflation easing, buyers and consumers will see real income growth in 2024 for the first time in a long time. So that's going to be a nice positive for the market as well.
J.D. DURKIN: Finally here, Danielle, what sort of advice would you give to homebuyers who are preparing to navigate the challenges of the real estate market in the new year based on all of your insights and all of your predictions?
DANIELLE HALE: Yeah so homebuyers thinking about navigating the home buying market in 2024 should know that prices remain relatively high. And even though mortgage rates have come down, they still also are relatively high. So buying a home continues to be a costly undertaking. But that affordability picture is starting to improve. I think it's important as they get into the housing market to really be focused on their financial situation, be prepared on their budget and make sure that as they're looking, they know what they have to have in a home, what's nice to have so that they can make trade offs and not get carried away. It's important to stick to a budget. Even though affordability is improving, the costs are quite high. And so we want to make sure that home homebuyers are setting themselves up for a sustainable situation and not stretching their budget, which can be an easy thing to do when the market pricing is high as it is today.
