Redfin Predictions for 2024

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Mortgage Loan Limits Are About To Increase In 2024 link

• In 2024, the Federal Housing Finance Agency and Federal Housing Administration will increase loan limits for homebuyers. This change is part of an annual adjustment to align with rising house prices.

• For FHFA loans, the new limit will be $766,550, up from $726,200 in 2023. In high-cost living areas, the limit can reach up to $1,149,825, benefiting buyers in places like California, New York, and Hawaii.

• FHA loans, appealing to those with lower down payments or credit scores, will see their limit rise to $498,257 from $472,030. These loans require a minimum 3% down payment and include private mortgage insurance.

Redfin Predictions for 2024  link

• Home prices are expected to fall by 1% in 2024, marking the first significant decline since 2012. This decrease is seen as a positive shift for buyers, especially since home prices ended 2023 up by around 3%.

• New listings are anticipated to increase, contributing to the drop in home prices. The rise in listings is partly due to homeowners accepting that mortgage rates in the 3% or 4% range are unlikely soon, prompting them to sell before further price drops.

• Home sales are projected to grow by 5% in 2024, with a total of 4.3 million sales expected. This increase is attributed to improved affordability and a greater number of homes on the market.

BTR Asset Class Poised to Become Institutionalized link

• Build-to-Rent (BTR) properties are emerging from a niche status, driven by increasing interest from investors and developers. Cushman & Wakefield's report highlights the growing appeal of BTR in the multifamily market.

• Currently, BTR constitutes only 1% of the overall multifamily market, but it's gaining momentum. The shift in resident perceptions of what constitutes a "rental home" is contributing to this trend.

• The report suggests a significant potential for BTR to expand and redefine the rental housing market. This change is indicative of evolving market dynamics and consumer preferences in the real estate sector.

Midwest Strength Stems from Stability, Not Apartment Demand link

• The Midwest region has shown resilience in apartment market performance, with many markets leading in rent growth and maintaining stable occupancy. This stability is attributed not so much to strong apartment demand but to the region's moderate supply compared to other U.S. regions.

• Apartment demand in the Midwest accounts for only about 15% of the total U.S. demand, with the Sun Belt and Mountain regions dominating at 70%. Despite lower demand, the Midwest's supply volume is also more moderate, allowing it to sufficiently meet the existing demand, contrasting with other regions where supply heavily outweighs absorption.

• The current trend in the Midwest, where supply and demand are more balanced, is unique compared to the rest of the nation. This balance has helped the region maintain a relatively stable apartment market, even as other areas face challenges with excessive supply.