After years of rising US home prices and mortgage rates, the Portland property market could see some relief in 2024, according to a new report.
Nationally, the real estate firm predicts that home prices will fall slightly – by about 1.7% – next year, although larger declines are expected in 21 of the country’s largest metro areas that Realtor.com analysed in its forecast.
Here, home prices are expected to fall much more than the national average. Realtor.com’s report predicts a 7.4% price drop in 2024 in the Portland metro area, which includes Vancouver, Washington.
Portland’s expected price drop is significant, but it’s not the biggest in the nation. Austin, Texas, could see the steepest decline, with a 12.2% drop expected. Not too far away in Spokane, Washington, prospective homebuyers could see prices drop by about 10% next year.
According to the National Association of Realtors (NAR), the price of a typical home in America jumped to $410,200 in June, the second highest in 24 years. The median price cooled in October this year, falling to $379,100, but that’s still 40 per cent higher than in October 2019.
Realtor said the shift in housing affordability could inspire some first-time buyers to enter the market, but high mortgage rates could deter some current homeowners from moving.
Meanwhile, Zillow said in its 2024 outlook that it expects homeowners who bought when rates were at all-time lows to put their homes up for sale as they “grow tired of waiting for the historically low rates of 2021 to return”.
The average rate for a 30-year fixed mortgage in the US is 7.22% as of November, the Associated Press reported Thursday, citing mortgage buyer Freddie Mac. Realtor predicts this will fall to an average of 6.8% next year.
“We’re not going to see a major breakthrough in the logjam that has been the housing market for the last year or so, but 2024 is going to be a baby step in the right direction,” said Realtor chief economist Danielle Hale. “It’s going to stop getting worse.”
Similarly, Lawrence Yun, the NAR’s chief economist, believes that interest rates will fall between 6% and 7% by the spring.
Although the market may stabilise next year, Realtor still expects challenges – such as low home sales, limited inventory and a shortage of move-in ready homes in desirable areas.
