Every year about this time, we start looking ahead to the next year. We dug into several charts, graph trends, and housing forecasts this week, and we’re a little early this year with our housing forecast show. Why is that? I’ll let you know.
Will the Housing Market Crash in 2024?
Yeah, it’s only October, and we’re already talking about next year. What gives? Quite honestly, I think we’re all done with 2023, or we would like to be at least already. So yeah, a little early this year, but for good reason.
The National MBA conference was last week, and we reviewed a few of their presentations and housing market forecasts. NAR, Zillow, and many others are also starting to come out with theirs this week as well. Now, sure, nobody knows for sure. These forecasts can certainly be wrong or off, but there seems to be one common thread between all of them. Let’s dig in.
Starting with the NBA chief economist Mike Fratantoni, he begins with some good news. Total mortgage origination volume is expected to increase to 1.95 trillion in 2024. That is up from 1.64 trillion expected to close this year in 2023. Purchase originations are forecast to increase by 11% in 2024. So that is good news.
By loan count, total mortgage origination volume is also expected to increase by 19% to 5.2 million units in 2024, up from only 4.4 million units that the industry is expected to close in 2023. So hopefully, we’re at the bottom of the pain trough trending up. Almost all the forecasts agree that a recession is imminent.
Will the Housing Market Crash in 2025?
Both fiscal and monetary policies have contributed to the much higher level of mortgage rates in 2023. The Fed’s hiking cycle is likely nearing an end. But while Fed officials have indicated that additional rate hikes may not be needed, rate cuts may not come as soon or proceed as rapidly as previously expected. Lower rates should help boost both homebuyer demand and increase the inventory of existing homes, thereby supporting purchase origination volume in 2024.
The job market will likely slow as we enter 2024, with fewer jobs added and the unemployment rate increasing from its current rate of 3.8% to 5% by the end of 2024. Inflation will gradually decline toward the Fed’s 2% target rate by the middle of 2025.
Housing Market Predictions Beyond 2025
Table: Housing Market Predictions 2024-2027
| Year | Key Forecasts |
| 2024 | Mortgage origination volume to increase to $1.95 trillion; Purchase originations forecast to rise by 11%; Unemployment rate to rise to 5%. |
| 2025 | Inflation to decline towards the Fed’s 2% target; Continued impact on homebuyer demand due to rates. |
| 2026 | A moderate rise in home prices; Pent-up demand for housing to be supplied between 2025 and 2030. |
| 2027 | Potential slowdown in construction activity due to changing demographics and continued urbanization trends. |
FAQs
Will the housing market crash in 2024?
While forecasts can be uncertain, the housing market is expected to see increased mortgage origination volumes in 2024, with a slight increase in purchase originations. However, a recession is considered imminent by most forecasts.
Will the housing market crash in 2025?
Inflation is expected to decline towards the Fed’s 2% target by mid-2025. This, along with potentially lower mortgage rates, could stabilize the market rather than lead to a crash.
What are the key housing market predictions for the next five years?
Predictions include increased mortgage origination volume in 2024, a gradual decline in inflation, and a potential slowdown in construction activity by 2027 due to changing demographics.
How will Section 8 housing be affected by the housing market trends?
While the general market predictions don’t specifically address Section 8 housing, the overall trend of increasing mortgage origination and homebuyer demand could impact the availability and cost of Section 8-approved homes for rent.
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Insightful analysis on the upcoming real estate trends, setting the stage for a well-prepared outlook. Valuable read indeed!
Market experts predict a slight slowdown in real estate growth due to rising interest rates and inventory challenges.
Question: How reliable are the projections for the next five years? Are external factors like inflation considered?
Author’s reply: We thoroughly analyze economic trends and external factors to create a well-rounded forecast. Your concern is valid.
“I recently attended the National MBA conference where I gained valuable insights into the 5-year real estate forecast.”
Isn’t it too early to predict the housing market for 2024? Will the projections made now hold up over time?
Author It’s a valid concern. We’re keeping a close eye and updating our forecasts as new data emerges
Question: Are there any specific factors or indicators that suggest the housing market will crash in 2024?
Author’s Reply: No specific indicators point to a housing market crash in 2024; early forecasts aim to provide insight and preparation.
Question Comment: “What factors are being considered in this forecast to predict the housing market’s stability in 2024?”
Author’s Reply: “We are considering economic indicators, market trends, and data from various sources for a comprehensive analysis of the forecast
Doubt comment: “How can you predict the housing market five years ahead with so many factors at play?”
Author response: “While predictions have limitations, we use current data, trends, and expert forecasts to provide informed insights.”
Question: Could external factors like interest rates impact the accuracy of the real estate forecast for the upcoming years?
Author’s Reply: External factors, such as interest rates, are considered in our forecast models to provide accurate predictions.
“Consider investing in emerging neighborhoods for better ROI as city centers may see decreased demand.”
Comment: “But how accurate are these forecasts considering unforeseen events can heavily impact the housing market? Can we truly trust them?”
Author: “Good point! Forecasts are based on current data & trends but unpredictable events can definitely influence outcomes.”
Doubt Comment: “What reliable data points are being used to predict market conditions five years out? Seems ambitious.”
Author Reply: “We consider historical trends, economic indicators, expert opinions, and current market conditions for a comprehensive forecast.”
The post lacks specific data points or expert insights to support the predictions. More credible sources could enhance credibility.
Experts predict a stabilization in the real estate market over the next five years, with steady growth expected.
Insightful analysis and proactive approach to the Real Estate Forecast for the next five years. A forward-thinking perspective – great read!
Experts predict a steady rise in home values nationwide, facilitated by low interest rates and strong demand.
Experts suggest small price dips may occur in 2023, but overall steady growth expected for real estate market.