Here's what 2024 could bring for the Triangle's housing market
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The Triangle's 2023 housing market was dominated by two factors: fast-rising interest rates and decreased home affordability.
Why it matters: The increase in interest rates kept both would-be home sellers and home buyers, either unable to justify the costs or unwilling to give up a low-interest rate to move, from entering the market.
- Next year, however, could bring some stability to the region's housing market and coax sellers and buyers back into the fold, experts told Axios.
Get used to the rates
After months of mortgage rates above 7%, both buyers and sellers will start to get used to elevated rates, said Susan Bashford, an agent with Hodge & Kittrell Sotheby's International Realty.
- Mortgages rates have fallen from their peak of 8% in October, but don't expect them to plummet, she said.
- Goldman Sachs, for one, is forecasting they'll stay above 7% throughout 2024.
Inventory will increase
Bashford believes stabilizing interest rates will lead to many more homes coming on the market in the new year.
- "The unstable interest rates certainly kept people on the sidelines waiting to see what would happen next," she said.
- But as they realize rates will remain elevated or as they are forced to move due to work or living situations, she said, more homeowners will list their homes.
Home values will stay flat
Despite supply increasing, home values are expected to remain mostly flat, according to Zillow, which is forecasting a 0.2% decline in home prices nationwide.
- Zillow notes that could give buyers more time to save up after several years of rapid price growth.
- Elevated interest rates, however, will also continue to make renting more attractive for many.
Adrian Brown, a broker with Inhabit Real Estate, told Axios that he's still seeing continued interest from buyers waiting for more homes to go on the market, which he thinks will keep prices stable.
- "If there's more inventory, buyers are just gonna get more excited," he said, noting he has many would-be buyers and sellers sitting on the fence because there are not enough homes to look at right now.
Negotiations are back on the table
After basically disappearing for the past few years, sellers will be more willing to negotiate and give concessions to buyers.
Already, between August and October, 51% of sellers in Raleigh gave concessions to buyers, like money for repairs or closing costs, according to a survey from Redfin.
- Both Bashford and Brown said they've seen more of a willingness from sellers to negotiate — especially compared to 2022, when homes were often getting multiple offers.
The bottom line: Interest rates will remain high but will stabilize in 2024, and as the shock wears off, more buyers and sellers will re-enter the market.