Change is in the air, and it’s not just the winter chill. Hopeful home buyers and strategic sellers are all perking up as the real estate market has begun to shift in the last few months. Gaining a sense of what’s to come can help you make a game plan for your 2024 real estate goals. In this article, we’ll cover three key shifts to keep an eye on in the upcoming year.
Interest Rates Will Continue to Fall
Interest rates have already fallen 1.5% from their 8% high in mid-October. We anticipate further decreases, meaning many buyers who have been waiting in the wings and running the numbers against their budgets will soon be placing offers on available homes. At the same time, current homeowners — especially those who bought starter homes during 2020 when interest rates were at record lows — may finally be able to cash in some home equity and upsize. This shift means more homes hitting the market and more general movement for both buyers and sellers.
Millennials Are Entering the Market in Droves
On top of interest rates that make buying more accessible, there are also thousands of millennials reaching home buying age and income levels this year. There are 72 million millennials in the U.S., and this generation is now aged 27-42. With the median age of individuals moving out of their parents’ home at 26 and the median age of first-time homebuyers at 35, millennials are now hitting lifestyle landmarks that often lead to home buying. The sheer number of millennials means that demand for homes is likely to hold strong in the coming year.
More Homes Will Hit the Market as Baby Boomers Downsize
Even in the slower months of the past year, supply has been a concern. Relatively high interest rates made current homeowners less likely to make a move. Now, the largest group of current homeowners is reaching the age where downsizing becomes a strong option. Baby boomers, those aged 65 and up, make up 52% of all sellers because of this drive to downsize. Expect an uptick in supply as baby boomers take advantage of lower interest rates and promising home appreciation.
With generational shifts driving movement and dropping interest rates fueling the fire, we expect an exciting year in real estate for 2024. Timing is everything with a market so ever-changing. Depending on your goals, looking to purchase in the first few months of 2024 may serve you well, with more interest rate drops likely in the future and plenty of opportunity to refinance. For sellers, the choice lies in whether to jump in on a first wave of renewed buyer activity or wait for rates to drop further, spurring more buyers but also more competition.
The world of real estate is never clear-cut or one size fits all. The good news is, we’re here to help! We’re ready to talk through your unique goals and situation to determine the best course of action to get you into your dream home. Whether you have questions about 2024 or you’re ready to talk through your next steps, give us a call at 719-337-7254 or 720-498-9592.