Now that Thanksgiving is behind us and December is well under way, we can start looking ahead to the 2024 housing market.
New listings and home sales remain low this week while available inventory of unsold homes is finally falling across the country after rising with mortgage rates late into November.
It’s looking like we’ll end 2023 with higher housing inventory than this time last year. Home prices will also be up and we have more homes under contract than we did at the end of 2022. All told, these signs position 2024 for a turnaround from one of the slowest home-sale years in decades.
Watch the video above to get the latest housing market update from Altos Research. Or you can check out some key data takeaways below for the week ending Dec. 4.
Inventory is falling
There are now 556,000 single-family homes on the market, down 1.8% from a week ago (which is normal for Thanksgiving). Inventory is 1.2% higher than last year at this time.
Looking ahead at 2024 inventory, rising rates creates more inventory. Falling rates will create a tighter market (more demand than supply). Even as inventory climbed this fall, it’s not evenly distributed across the country.
The South leads with more inventory buildup while the West and the Northeast have less inventory than a year ago.
New listings still coming on housing market
There were only 33,000 new listings after the Thanksgiving holiday, but that’s normal and in line with annual seasonality in the real estate housing market. We want new listings volume to show growth. More sellers equals more home sales in 2024.
Price reductions taper off
Price reductions are receding now for the new-year cycle, with 38.7% of the homes on the housing market taking a price cut in the last week. That’s a lot, but it’s less than the same week a year ago, and it’s not deteriorating.
Home prices show resiliency
Home prices held up surprisingly well in 2023 despite very few transactions. The median price of single-family homes in the United States was $425,000 for the week, which is unchanged from the week prior and 2% higher than the same period in 2022.
We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume and elevated but decreasing price cuts.
All in all, things are looking up for the U.S. housing market in 2024.
Mike Simonsen is the president and founder of Altos Research.