NAR Forecasts a 13% Increase in Existing-Home Sales This Year
WASHINGTON—The National Association of Realtors released earlier today (Jan. 26) pending home sales data and its economic forecast for 2024 in which it projects that existing home sales will increase 13% as compared to 2023.
NAR reported that pending existing-home sales in December rose 8.3%. The Midwest, South and West posted monthly gains in transactions while the Northeast recorded a loss. The Midwest, South and West also registered year-over-year increases while the Northeast had a decline in transactions compared to last year.
The Pending Home Sales Index increased to 77.3 in December. Year-over-year, pending transactions were up 1.3%. An index of 100 is equal to the level of contract activity in 2001.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” said NAR Chief Economist Lawrence Yun. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
Pending Home Sales Regional Breakdown
The Northeast PHSI dropped 3.0% from last month to 62.3, a decline of 3.9% from December 2022. The Midwest index increased 5.6% to 80.5 in December, up 4.3% from one year ago.
The South PHSI jumped 11.9% to 93.0 in December, rising 1.5% from the prior year. The West index surged 14.0% in December to 61.0, up 1.5% from December 2022.
NAR Quarterly U.S. Economic Forecast
NAR’s Economic Outlook as of January 2024, projects a 13% increase in existing-home sales in 2024 (from 2023) to 4.62 million and a 15.8% increase in 2025 (from 2024) to 5.35 million. The annual median home price is expected to rise 1.4% to $395,100 in 2024, and then increase 2.6% to $405,200 in 2025.
“Home sales are projected to rise significantly in each of the next two years as the market steadily returns to normal sales activity,” Yun noted.
The Federal Reserve will likely cut interest rates four times. The 30-year fixed mortgage rate will bounce along the 6% to 7% range for most of the year, he stated.
NAR forecasts that due to sizable growth in apartment construction over the past three years, rent growth will calm, which will help bring consumer price inflation to less than 3% in 2024.
