Redfin Predicts 2024 Will Be the Year Homebuyers Catch a Break

(Illustration courtesy of Redfin)

Signs point to a shift toward a buyer’s market in 2024 as pandemic-driven inflation takes its last gasps, mortgage rates come down and more people list their homes for sale, according to Redfin, Seattle. 

In its annual end-of-year predictions report, Redfin said it expects to see an acceleration of consumer-friendly changes to the way Americans buy and sell homes.

Prediction 1: Home prices will fall 1%

Prices will fall 1% year-over-year in the second and third quarters, when the home-selling season is in full swing, Redfin predicted. “That will mark the first time prices have declined since 2012, when the housing market was recovering from the Great Recession, with the exception of a brief period in the first half of 2023,” the report said.

That’s a favorable shift for buyers: Prices are likely to end 2023 up around 3% year over year, and the typical homebuyer’s monthly payment is only about $150 shy of its all-time high. Home prices will still be out of reach for many Americans, but any break in the affordability crisis is a welcome development nonetheless.

Prediction 2: New listings will tick up

Home prices will fall because supply will rise more than demand, Redfin predicted.

“Listings will climb from 2023’s record low as the mortgage-rate lock-in effect eases,” the report said. “Nearly all mortgaged homeowners have a rate below the current level. Many are starting to accept that rates won’t drop back to the 3s or 4s anytime soon, and they want to sell before prices fall.”

Prediction 3: Home sales will increase and end the year up 5%

In the first quarter, existing home sales will be on pace for 4.1 million total in 2024, up from an annual pace of 3.85 million in the fourth quarter of 2023, the report said. “Sales will continue rising throughout the year; they’ll be on pace for a total of 4.5 million by the fourth quarter. Home sales will speed up throughout 2024 as affordability improves and more homes hit the market,” Redfin said.

Overall, Redfin said it expects 4.3 million sales in 2024, up 5% year over year. “A crucial difference between 2024 and 2023 will be sales gaining momentum throughout the year instead of losing momentum,” the report said. The full report is available here.