In his latest Mid-Year Bold Predictions, Brian Buffini, the chairman and founder of Buffini & Company, joined forces with Katie Johnson, the Chief Legal Officer of the National Association of REALTORS® (NAR), to provide a glimpse into the future of the real estate market. Here's a summary of his insights, covering negative headlines, current research, and expectations for the rest of 2024.
***IMPORTANT: It's worth noting that these are nationwide statistics, and although we're seeing many of these trends locally here in Westchester County, please contact our team for more local-specific information which can often differ from what is happening at the national level.
Navigating Media Narratives
Buffini addressed the negative media coverage by presenting fact-based research and analysis about the real estate market's current state. Despite the market being at its worst since the mid-90s, he forecasted that 40% of home sales would occur in the fall of 2024. This optimism is driven by increasing inventory as more sellers list their properties and new home construction expands in nearly all major markets. Additionally, sales volumes have improved recently, with 36.7% more homes on the market compared to last year, suggesting a more optimistic market outlook.
The Pressure of Rising Rents
The continuous rise in rents has made both home sellers and buyers less sensitive to what were previously considered high home prices. According to CNBC, over 12 million Americans now spend more than 50% of their income on housing. As a result, people are still buying and selling homes, acknowledging that what once seemed unaffordable is now commonplace. This dynamic fosters ongoing activity in the housing market, with both buyers and sellers adjusting to the changing economic conditions.
Anticipated Easing of Mortgage Rates
Buffini shared his perspective on how buyers and sellers are becoming less affected by mortgage rates, which have stubbornly stayed around 7% in recent months. However, he predicts a rate cut this year, potentially bringing rates down to 6.67%, with further reductions expected in 2025.
The Millennial Impact
Buffini highlighted the significant impact of the millennial generation — roughly 72 million individuals in the United States — on the real estate market's future. Typically, people leave their family homes at 26 and buy their first homes at 35.
This group, around 45.5 million strong, is eagerly waiting to enter the market once mortgage rates decline. Having dealt with economic uncertainties, student debt, and fluctuating job markets, millennials are keen to achieve stability through homeownership.
Their entry into the market is anticipated to generate substantial demand, potentially revitalizing both urban and suburban regions. Their preferences for sustainable living, proximity to amenities, and smart home technologies are expected to influence popular property types. As rates become more favorable, the influx of millennial buyers could intensify competition, fueling further activity in an already vibrant real estate market.
For more tailored local insights, connect with The Geiger Stern Team as we navigate the remainder of 2024 together!
