5 Ways Inflation Could Affect the 2024 Housing Market

Homeowners across the nation have felt the financial pressure of inflation. Rising mortgage rates have caused a slowdown in U.S. housing market activity, leading numerous buyers to postpone purchases; nevertheless, home values persist, showing resilience amid this trend.

According to a recent Goldman Sachs report, their market analysts estimate that home prices have gone up 4.2% so far this year but will dip slightly to wrap up the year with a +3.4% year-over-year increase. This will be followed by a more moderate rise of 1.3% projected for 2024.

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Before you make any move, it’s important to examine the current housing market and listen to what the experts are saying about inflation’s impact on homes. This is an in-depth look at how inflation is affecting the housing market, and what it means for you.

Anticipated decline in 2024 inflation: What to expect

Goldman Sachs foresees the global economy surpassing expectations in 2024, driven by strong income growth and confidence that the most significant interest rate hikes are in the past. The investment bank projects the worldwide GDP to expand 2.6% next year on an annual average basis.

The U.S. is anticipated to outperform other developed markets, with an estimated growth of 2.1%. Moreover, Goldman suggests that the impact of monetary and fiscal tightening policies has largely eased.

The investment experts at Morningstar are predicting a decline in inflation, which peaked in 2022, expecting it to diminish by the end of 2023 and into 2024. Their latest Economic Outlook attributes this to resolving supply chain issues and a moderated economic pace due to the Federal Reserve’s measures. They predict inflation to average 1.8% from 2024 to 2027, below the Fed’s 2% target. If inflation persists, Morningstar says the Fed stands ready to induce a recession to align it with the 2% target.

According to U.S. Labor Department data published on November 14, 2023, the annual inflation rate for the United States was recorded at 3.2% for the 12 months ended October, down from the previous rate of 3.7%, as highlighted by Coin News’ U.S. Inflation Calculator.



from HomeLight Blog https://www.homelight.com/blog/how-will-inflation-affect-the-housing-market/

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