Baltimore’s 2024 Real Estate Predictions
Tata to 2023, and hello to a brand new year of real estate trends, inventory, and (hopefully) the drop in rates we’ve all been waiting for!
Last year’s housing market left buyers scrambling for answers in the wake of spiking interest rates, and sellers hesitant to enter the market due to shifting housing affordability. However, this year is looking like a whole new ball game—and no, we don’t see any curve balls in our future.
From dipping mortgage rates to inventory upticks, Baltimore is sure to see some slight shifting in the housing market, but change has always been good for Charm City. So as your Baltimore real estate experts, Your Home Group is here to shed some light on the upcoming real estate market. Keep reading for the inside scoop!
STATE OF THE MARKET
Before we dive too deep into 2024 housing market predictions, it’s important to note the impact of last year’s market. Overall real estate transactions for both buyers and sellers were down significantly compared to previous years.
This is due to the painful combination of high interest rates and inventory shortage. Some might consider last year a real estate “Bear Market” as you would the state of the economy. However, even with the lack of sales in 2023, homeowners did not lose equity in their homes. This is because of the increasing demand for inventory as buyers flood the market and homeowners refrain from listing homes.
So even with a dip in sales and peaking interest rates, the real estate market has stayed afloat—and will continue to do so as the market shifts over the next few years.
MORTGAGE RATES
Mortgage rates, the topic you’ve all been waiting for. So, let’s cut right to the chase—yes, rates are expected to decrease this year. Because rates have a direct correlation to inflation rates, the FEDs have prolonged most cuts until inflation rates lower to 2% (more info). With inflation currently sitting around 3%, many experts believe mortgage rates will start a steady decline throughout the year.
The real estate experts at Buffini & Co. project the rates to hit the mid 6’s during July and even high 5’s by the end of the year, a significant dip compared to the 8% peak in October of 2023. While these projected rates might not look like the 3’s and 4’s of a few years ago, it’s important to remember that the record-low rates of 2020 and 2021 were artificially stimulated in response to the world-wide pandemic. We will not be making a return to such low rates in the near future, so make sure to keep this in mind when setting your 2024 real estate goals.
SELLERS’ TIME TO SHINE
If you have been waiting to sell your home in fear of affording the latest interest rates, this is the year to make your move. With interest rates projected to lower and pent-up buyer demand increasing on the daily, 2024 will offer ideal market conditions.
As for housing supply, we have the lowest inventory numbers since pre-covid—perhaps even 1993 according to NAR’s Chief Economist Lawrence Yun. With increasing demand for homes and such little supply, sellers have the most to gain in the approaching real estate market.
BUYER UPDATE
As for buyers, a large wave of first-time home buyers are projected to hit the market. 45.5 million people are about to enter the “household formation” stage of life.
More often than not, the main reason people seek new homes is due to a significant life change. With many millennials entering the stage of starting families and moving away from rental properties, there will be a great demand for starter homes and suburban communities.
SUMMARY
Well, there you have it folks. Our crystal balls haven’t revealed any foreclosure crisis or housing bubbles—just a slight shift in interest rates and inventory that leaves us optimistic for the market ahead. However, if you’re looking for more personalized data, we’d love to grab a coffee and discuss what’s going on in your hometown.
No matter if you’re buying your first home or want to invest in another Baltimore property, Your Home Group is here to act as your guide to the local real estate market. Don’t hesitate to reach out if you have any questions, and make sure to give us a call when you’re ready to embark on your 2024 real estate journey.
