Why will some U.S. home prices plummet in 2024 according to experts?
High mortgage rates and low inventory have made housing market conditions difficult for would-be homebuyers. Certain areas might see some relief this year.
Home prices began going up during the pandemic, when mortgage rates fell, work-from-home became common practice, and people had more disposable cash to spend.
Mortgage rates reached record highs last year, which made sellers who were open to selling their homes hesitant to give up the lower rate on their existing mortgages.
This exacerbated the low supply of homes, which has fueled the dramatic price increases seen in the past few years.
Many real estate experts predict that home prices will continue to be elevated this year and that they will continue rise before 2024 ends.
However, there are some areas which they say are bucking the trend and could see price tags on houses going down later this year.
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Why will some U.S. home prices plummet in 2024 according to experts?
Some cities have long had overpriced housing markets, such as San Francisco, California. According to Zillow, the current average home costs $1,299,639, which is down 0.3% from last year.
Experts say prices could go down even further before the year ends, with people leaving the city due to the high cost of living. The tech industry has also allowed some employees to work remotely, which has caused outmigration.
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New York City, like San Francisco, has also long been one of the most expensive places to live in the United States. The possibility of remote work has also caused people to head out and move to cheaper places. Experts see home prices decreasing in the Big Apple by 5% to 8% later this year.
Seattle, Washington has also seen the market cooling due to the high cost of living and the tech industry’s transition to the flexible work lifestyle.
Meanwhile, in the Midwest, some markets like St. Louis, Missouri have already seen prices dropping in 2024, and this trend is likely to continue. This is partly due to the increased availability of smaller and cheaper homes in the market.