NAR Forecasts Brighter 2024

Lawrence Yun, the forecaster for the National Association of Realtors (NAR), is predicting a promising 2024 for the real estate market. According to Yun, the coming year will bring higher sales and lower interest rates, providing a breath of fresh air for home buyers and sellers alike. This optimistic outlook comes as a welcome change after what has been a tumultuous period for the market.

Challenging 2023

The year 2023 has been one of the most challenging for the real estate market, with home sales plummeting to levels seen only during the 2008 financial crisis and as far back as 1995. Despite these hardships, Yun is confident that the market is poised for a turnaround. The key factors underpinning this optimistic forecast include an increase in housing starts and a notable surge in multi-family construction projects across the nation.

Housing Starts and Multi-Family Construction

Housing starts are beginning to trend back toward sustainable levels, signaling a positive shift in the construction industry. Moreover, the uptick in multi-family construction nationwide is expected to ease rising rental costs. This trend is likely to contribute to softer rent growth, which could have a welcome domino effect on consumer price indices and interest rates, ultimately making home ownership more affordable for potential buyers.

In Spokane County, the median home price is currently $407,400. This figure places the local market in a relatively strong position, especially when considering Yun’s forecasted home price increases. Such increases are expected, particularly in regions that have not experienced the same level of price appreciation as neighboring states over the last several years.

Interest Rates and First-Time Buyers

A significant drop in interest rates can have an outsized impact on the market, especially for first-time home buyers. Each percentage point reduction in interest rates will enable more first-time buyers to qualify for mortgages, thereby increasing competition for entry-level and workforce housing. This increased competition could stimulate further market activity and help ease some of the pressures currently felt by potential home buyers, particularly in high-demand areas.

Over the past three years, Washington State has seen a substantial 43.8% increase in home price appreciation, while other Western states like Idaho, Montana, Utah, and New Mexico have experienced even higher increases. Despite regional variations, Yun believes that the overall market outlook is favorable and that critical market conditions are aligned for a markedly better year ahead.

For more insights into the real estate market and local listings, visit forsalespokane.com.