In the optimistic landscape of 2024, Zillow economists foresee several encouraging trends in the housing market:

1. Abundance of Homes on the Market: Homeowners, understanding that mortgage rates are unlikely to decrease significantly soon, are anticipated to list their homes for sale. Those who secured long-term payments at historically low rates in 2021 may decide to make a move, gradually increasing the number of homes available. This positive development is expected to provide a wealth of options for homebuyers and reduce competition, creating a more favorable environment for finding the perfect home.

2. Steady Home Buying Costs: Despite expectations of continued high mortgage rates, Zillow forecasts that home values will remain steady in 2024, potentially even experiencing a slight decrease of 0.2%. This stabilization in home values, coupled with the possibility of steady mortgage rates, is poised to level off the overall cost of purchasing a home. This uplifting trend could provide much-needed relief for homebuyers, offering them an opportunity to catch up as the rapid rise in housing costs slows down.

3. Improved Affordability Outlook: While affordability remains a top concern, Zillow suggests that the challenges may ease slightly in 2024. The projection of steady home values and a potential modest decrease could contribute to improved affordability. The forecast indicates that the share of income spent on a mortgage may decrease, especially if wage growth continues, creating a more positive environment for potential homebuyers.

4. Rise in Single-Family Rentals: Despite improvements in home buying affordability, many households may still find themselves unable to enter homeownership. Zillow predicts a surge in demand for single-family rentals as families seek more affordable options while enjoying amenities like a private backyard. Homeowners opting to turn their properties into investment opportunities and rent them out instead of selling when they move are contributing to the growth of the single-family rental market, providing a positive alternative for those seeking flexible living arrangements.

In summary, Zillow’s 2024 housing market predictions paint an optimistic picture, suggesting an increase in housing inventory, stabilized home buying costs, improved affordability, and a growing trend towards single-family rentals as a positive alternative for those navigating the housing market.