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Predictions for 2024 Real Estate

  • Mike McCurry
  • 12/22/23

In light of interest rates already coming down, it is an encouraging sign for the market and 2024. Locally, our greatest obstacle is freeing up inventory where those potential sellers do not want to leap frog into an interest-rate that is double what they currently have in place. There is a chance that the move is more palatable if the spread is not so wide. – Mike McCurry


How Falling Rent Prices Foreshadow the Path for CPI (Consumer Price Index)

CPI rent has continued its downward trajectory as many have expected over the last several months. Shelter costs, expressed in the measure called Owner's Equivalent Rent, is 1/3rd of CPI. However, the Fed's measurement is a lagging indicator that is almost one year behind the current market for rents.

Actual rents peaked in mid 2022 according to the chart above and have most recently bottomed to almost 0% YoY growth. However, the CPI measurement is still 12 months behind so that has not fully flowed through CPI yet. If you were to replace the Fed's measurement with the real-time rents measurement, CPI would already be much below the Fed's target of 2%.

Given this, many have said that barring any external shocks, as this data catches up throughout 2024, CPI should continue to come down and mortgage rates with it.


Optimistic for a Strong Start to 2024

When mortgage rates hit 8% in late October, the expectation was that the already sluggish market would continue to slow into the end of the year. However, only seven weeks later and mortgage rates are only slightly above 7% and some lenders are quoting mortgages in the 6% range. See below for Wells Fargo's latest quotes:

Looking forward, if inflation continues to decrease, the Fed's rhetoric might shift from how long rates will stay elevated to how soon they will begin cutting rates. That could help bring rates down significantly and hopefully jump start the housing market again.

As we await that outcome, there are some signs the market is starting to improve. Even though many homeowners won't sell given the low rates many have, new listings of homes are up 6% year-over-year. Many believe this is being driven by major life events (or “the 5 Ds” — diapers, diplomas, diamonds, divorce and death) that happen regardless of where mortgage rates are. Additionally, mortgage purchase applications rose 15.7% in November as rates declined from the recent peak. Granted, this increase is coming off the lowest levels in decades, but it shows that lower rates and more choices could draw buyers back into the market.

Should rates continue to fall, while the expectation is that there will be more inventory on the market, there should be more buyers willing to transact. Given the already very low inventory that exists, many people might find themselves in bidding wars that resemble 2021 all over again. Transacting in that environment can be hard and is a great reason why partnering with an experienced real estate agent is critical.




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Mike believes that people are at the heart of every real estate transaction. That’s why his approach to buying and selling always starts with developing a real relationship with his clients.

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