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C.A.R. PUBLISHES ITS CALIFORNIA HOUSING MARKET FORECAST FOR 2024

Tuesday, January 2, 2024   /   by Bob Cowan

C.A.R. PUBLISHES ITS CALIFORNIA HOUSING MARKET FORECAST FOR 2024

california housing market forecast 2024.jpg




According to C.A.R.'s "2024 California Housing Market Forecast," the baseline scenario predicts that existing single-family home sales will rise by 22.9 percent in 2019 to 327,100 units, from the anticipated 266,200 units in 2023. The 2023 figure is a 22.2 percent decrease from the 342,000 dwellings sold in 2022.

After a projected 1.5 percent decline to $810,000 in 2023 from $822,300 in 2022, the median home price in California is expected to grow 6.2 percent to $860,300 in 2024. The competitive housing market and ongoing housing shortage will keep driving up home prices in the upcoming year.



“2024 will be a better year for the California housing market for both buyers and sellers as mortgage interest rates are expected to decline next year,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “A more favorable market environment with lower borrowing costs, coupled with an increase in available homes for sale, will motivate buyers and sellers to reenter the market next year. First-time buyers who were squeezed out by the highly competitive market in the last couple of years will try to attain their American dream next year. Repeat buyers who have overcome the “lock-in effect” will also return to the market as mortgage rates begin to trend down.”

 

The U.S. gross domestic product is expected to grow by 0.7 percent in 2024, according to C.A.R.'s 2024 estimate, following a projected 1.7 percent increase in 2023. California's unemployment rate will rise to 5.0 percent in 2024 from a projected rate of 4.6 percent in 2023, with the state's nonfarm job growth rate of 0.5 percent in 2024, up from a predicted increase of 1.4 percent in 2023.

Over the next 18 months, inflation will continue to gradually decrease; in 2024, the CPI will be 2.6%, down from 3.9% in 2023. Because of this, the average interest rate on a 30-year fixed mortgage will drop from 6.7% in 2023 to 6.0 % in 2024. The expected average 30-year fixed mortgage interest rate for the upcoming year will be less than the long-term average of roughly 8% over the previous 50 years, even if it will still be higher than the levels seen in the years just before the epidemic.

 

Despite a predicted 10% to 20% rise in active listings, the supply of housing in 2024 will still be below average because of improving lending conditions and market circumstances.

“With the economy expected to soften in 2024, the Federal Reserve Bank will begin loosening its monetary policy next year. Mortgage rates will trend down throughout 2024, and the average 30-year fixed rate mortgage could reach the mid-5% range by the end of next year,"


said C.A.R. Senior Vice President and Chief Economist Jordan Levine.

2024 CALIFORNIA HOUSING FORECAST

2017

2018

2019

2020

2021

2022

2023p

2024f

SFH Resales (000s)

424.9

402.6

398

411.9

444.5

342

266.2

327.1

% Change

1.7%

-5.2%

-1.2%

3.5%

7.9%

-23.1%

-22.2%

22.9%

Median Price ($000s)

$537.9

$569.5

$592.4

$659.4

$786.8

$822.3

$810.0

$860.3

% Change

7.1%

5.9%

4.0%

11.3%

19.3%

4.5%

-1.5%

6.2%

Housing Affordability Index*

29%

28%

31%

32%

26%

19%

17%

17%

30-Yr FRM

4.0%

4.5%

3.9%

3.1%

3.0%

5.3%

6.7%

6.0%

Buyers may be able to afford homes at higher costs because they will have greater financial flexibility, which may lead to a rise in housing demand and home prices.

Is Now a Good Moment to Invest in California Real Estate?

The monthly Consumer Housing Sentiment Index published by C.A.R. shows that, in April 2023, 59% of consumers—up from 55% the previous month—said it was a good time to sell. About 25% of respondents, the same as last year, think now is a good time to buy a house. Given the decline in rent, would it be smart to stay put for a few more years?  Are you going to be looking for a new rental property? View national rent rates by city as well as city-by-city cost of living.

In this year 2024, will home prices in California keep rising?

Many purchasers want to know if house values will go up or down.  Renters want to know if their rent will go down. The combination of little supply, cheap mortgage rates, and great demand will probably drive up the cost of houses and condos.  Both the trend and the return of consumers are here.  California's positive sales statistics are a result of several factors:

desire to live away from the city in suburbs and rural regions and willingness top pay top dollar or homes

record-low mortgage rates

moving to regions (pandemic destination) that offer more room perhaps with an office or garden>

wealthy buyers have the funds ready

#CaliforniaHousingMarket #HousingMarketForecast #medianhomeprice #homeprice #californiahousing #california #HousingMarketForecast2024


  bob cowan, platinum living realty, california, january 2024

Platinum Living Realty
Bob Cowan
120 Newport Center Drive
Newport Beach, CA 92661
949-441-9918
DRE# 01970237

Based on information from California Regional Multiple Listing Service, Inc. as of April 14, 2024. This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
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