Real Estate Shortage Expected to Worsen in 2024
If you thought the current shortage of real estate listings was bad, a new forecast from Realtor.com suggests it’s only going to get worse. According to their predictions, the shortage will shrink at more than double this year’s pace, making it even more difficult for homebuyers to find available properties.
Forecast Predicts 14% Decline in Listings
Economists at Realtor.com expect a 14% decline in U.S. listings of previously-occupied homes in 2024. This is a significant increase compared to the 5.7% decrease in inventory this year and the 4.4% drop last year. The forecast also breaks with other major forecasters by predicting that the median sale price will fall for the first time in over a decade, dipping 1.7% after double-digit increases in both 2021 and 2022.
Homeowners Reluctant to Move
As the number of homes for sale continues to dwindle, homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place. However, new construction and rental options may serve as a “relief valve” for prices, according to the economists.
Record-Low Mortgage Rates Contribute to Shortage
The longstanding shortage of homes has only gotten worse since the early pandemic’s record-low mortgage rates triggered a buying craze. The majority of U.S. mortgages now have an interest rate of under 4%, which is about half of today’s prevailing rates and well below the 6.8% average Realtor.com expects for next year. This leaves many homeowners unwilling to increase their costs in a sale.
The “lock-in effect,” in which the gap between market mortgage rates and the mortgage rates existing homeowners enjoy on their outstanding mortgage, will remain a factor. This means that as long as mortgage rates remain relatively low, homeowners may be hesitant to sell and purchase new properties, further contributing to the real estate shortage.
Preparing for the Real Estate Shortage
As the real estate shortage continues to worsen, it’s crucial for homebuyers and sellers to be prepared. Visit Jessica Fulk’s website for valuable resources, tips, and listings to help you navigate the challenging real estate market. From Mission Hills to Overland Park and beyond, Jessica Fulk can provide the guidance and expertise you need to make the best decisions for your real estate journey.
Orginal article: Link To Article – provided by Kansas City Realtors