Throughout 2023, the U.S. housing market grappled with high mortgage rates, impacting both buyers and sellers. By late October rates peaked around 7.79%, the highest since 2000, solidifying affordability challenges and contributing to a stagnating market.
However, there was a slight recovery towards the year's end as rates began to fall, leading to an increase in home purchase applications.
As we look to 2024, the economic slowdown and a potential moderation in inflation might lead to a gradual easing of mortgage rates, predicted to stay within the 6% to 7% range. Despite this, the housing market is expected to face similar challenges to 2023, with low transaction volumes and limited inventory. House prices are forecast to rise modestly, continuing the trend from 2023Â .
While it is impossible to know exactly what interest rates will do in 2024, the outlook suggests that 2024 might offer slightly better mortgage rate conditions, potential homebuyers may still encounter challenges, including affordability issues and a tight supply of homes.