Biggest predictions for the US housing market in 2024

Mortgage Rates Trend Downward at Year-End link

• Mortgage rates have seen a decrease over the last two months, with 30-year fixed-rate mortgages averaging 6.61% as of December 28, 2023. This marks a slight decline from the previous week's average of 6.67% and is a change from the same period last year when it was 6.42%.

• The 15-year fixed-rate mortgages also dropped to an average of 5.93%, down from 5.95% the previous week. This trend reflects a broader economic landscape characterized by a tight labor market, strong growth, and decelerating inflation.

More Retail Stores are Doubling as Micro-Fulfillment Centers link

• Retailers like Boot Barn, Walmart, Walgreens, and Target are transforming their stores into micro-fulfillment centers. This shift allows them to stock more inventory and expedite shipping to customers.

• The new business model is a response to changing consumer demands for quicker delivery times. It's a strategic move to leverage physical stores for faster distribution.

• This trend signifies a blend of traditional retail and e-commerce strategies. It's an innovative approach to meet the evolving needs of the modern shopper, combining convenience with speed.

Here are top experts' biggest predictions for the US housing market in 2024 link

• The US housing market in 2024 is expected to see changes as interest rates fall and builders add more inventory. Realtor.com predicts a 6.8% average for the 30-year fixed mortgage rate next year, potentially slowing demand and leading to a 1.7% dip in prices.

• Goldman Sachs forecasts a slight dip in existing home sales in 2024, with a rebound expected in 2025. New home sales are projected to rise, and housing starts are anticipated to increase, reflecting a response to the current housing shortage.

• Zillow and Fannie Mae suggest a stabilization in the housing market, with prices not falling significantly but the rate of growth leveling off. Mortgage rates are expected to average around 6.7%, with a gradual recovery in existing home sales and a modest economic downturn impacting new home sales.

The Pandemic-Driven Migration Boom Is Waning, With the Share of Homebuyers Relocating at Lowest Level in 18 Months link

• The trend of homebuyers moving to different metro areas is declining, with the share dropping to 23.9% in November 2023, the lowest in a year and a half. This marks the first annual decline in Redfin's records, down from a peak of 26% over the summer.

• Popular relocation destinations remain relatively affordable cities like Sacramento, Las Vegas, and Spokane, WA. Despite the overall decrease in migration, these areas continue to attract homebuyers, especially from high-cost cities.

• Los Angeles has become the top metro area that homebuyers are leaving, surpassing the Bay Area for the first time. This shift reflects changing migration patterns, with coastal job centers like Los Angeles and the Bay Area experiencing significant outflows due to high living costs.

Here is Where Industrial is Growing the Fastest link

• Industrial development has seen a significant decline in 2023, with starts falling nearly half to 66.2 million square feet in Q3 from 100.6 million in Q1. Despite this nationwide slowdown, Dallas and Phoenix emerge as leaders in new industrial projects.

• Phoenix tops the chart in industrial starts, contributing to over 17% of the national total alongside Dallas. This highlights the resilience and growth potential of these markets even amid broader industry challenges.

• Southern California experiences a unique trend with double-digit rent growth. Inland Empire, Los Angeles, and Ocean County are witnessing this surge, indicating a robust demand in these regions despite the overall normalization in the industrial sector.