2024 market outlook: What needs to happen for a robust year MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

For decades, the real estate industry has been a linchpin in building a strong middle class and thriving economy. Homeownership, after all, is a key component of the traditional American dream. That’s still mostly true, but there’s no doubt things are changing.
First-time homebuyers face more hurdles than ever to break into the market. Housing inventory is an enduring challenge. And federal lawsuits may change how agents earn a living in real estate sales. So where do we go from here, and what needs to happen in 2024 to ensure a strong, robust industry that maintains its place as a key wealth builder for American families?
Mortgages and lending

So much of the housing market slowdown of the last two years has centered on the Fed’s decision to raise interest rates to combat inflation, which has simultaneously raised rates on mortgages. After more than a year of increases, the Federal Reserve announced December 13, 2023 that a pause in interest rate increases would continue and that a series of rate cuts is likely in 2024. That’s great news for homebuyers who have watched inventory shrink in markets across the country. After hitting a high of seven point seventy nine percent in August 2023, rates fell to six point ninety five percent the week of December 14, 2023 marking their first positioning below seven percent since August 2022.

The news also sent a jolt of positivity rippling through the real estate industry. There’s real belief in brokerages and lender offices across the country that the lull of 2023 is over, and 2024 has the potential to be a rebound year. Victor Ciardelli, president and CEO of Guaranteed Rate, is very optimistic about 2024 in light of the Fed’s announcement. “Interest rates have come down a little,” he said. “I feel like they’re going to keep coming down. I also think there’s a lot of pent-up buyer demand. As soon as interest rates start getting into the fives, things are really going to start to move. There are a lot of buyers out there who are going to start to engage.”

The market has been waiting for a while to feel that the Fed believes inflation is starting to come down, Ciardelli said. As the price of goods and services return to normalized levels, interest rates should improve. “In our company, people are really pumped and excited,” he said. “There’s no doubt there’s a tremendous amount of optimism with everybody. And they should be optimistic. The more optimistic people are and the more excited people are, it’s the law of attraction, it feeds into a better purchase market. Real estate agents start talking about it. Loan officers are talking about this is the time to jump in, this is the time to buy. And then it just feeds on itself. It’s really going to propel the marketplace in a positive way.”

Lenders have many tools at their disposal for helping first-time buyers enter the market in the coming year, Ciardelli said. “There’s more first-time homebuyer affordable programs today than there ever has been,” he said. “Fannie, Freddie, FHFA, VA, FHA have all really expanded their guidelines, specifically for first-time homebuyers. It’s honestly really worked out well for first-time homebuyers. Now with interest rates coming down and with low down payment assistance programs, it really puts the first-time homebuyer in a better position than ever before.” Making the market work for agents Thad Wong has witnessed the market soar and dip multiple times since he got his start in real estate in the mid-1990s. The co-CEO of @properties and Christie’s International Real Estate has seen plenty, and he’s expecting a market rebound in 2024.

“I’ve never been more optimistic for a more robust spring market than what’s currently anticipated,” he said. “I’m extremely bullish. I believe the market will surpass expectations. I personally don’t expect rate reductions until Q3, and my hope is that those reductions will only continue to fuel the market through the year.” There have been plenty of questions and concerns in the wake of the agent compensation lawsuits brought against NAR and several large brokerages in 2023. In that turmoil, Wong sees opportunity for agents.

“I would like to see a flight to quality, meaning any good news that may materialize from these lawsuits would be greater discretion from the consumer about which agent and which brokerage to align with,” he said. “I think what will happen is greater scrutiny of the value proposition of both agent and their brokerage to yield a greater consumer experience. Bottom line: Better brokers will rise, worse brokers will fall.”

One of the differentiators for agents, and something agents can do to stay on top of their game this year, is a greater focus on marketing, Wong said. He’s hopeful agents will “reinvigorate” their marketing efforts, using social media, direct mail, Private Listing Network and more to take advantage of the expected improving market this spring and beyond.

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