The real estate market was brutal for home buyers in 2023 as mortgage rates soared above 8% and home prices touched a record high in June. In 2024, buyers in some markets may again not get much of a break, according to a new forecast.
While home prices are expected to appreciate by 2.5% nationally this year, residential real estate in 20 U.S. cities could see pricing gains of at least double that rate, property research firm said. At the same time, a handful of metropolitan areas could see home prices fall, the analysis found.
Only about 16% of homes were affordable for the typical home buyer last year, Redfin economist Zhao Chen told CBS News last month. By comparison, the share stood at about 40% prior to 2022, when mortgage rates began to creep upwards in response to the Federal Reserve’s move to start hiking interest rate hikes to combat inflation.
Typically, higher financing costs can weigh on home prices because buyers have to adjust their budgets to compensate. But 2023 bucked that trend as buyers competed for scarce inventory.
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