Based on the declining inflation rate, the Federal Reserve is satisfied with its effort to slow the economy by raising interest rates. Barring different economic news, they signaled that they are done raising rates and may even lower rates during 2024. While mortgage rates are not directly controlled by the Fed, they generally follow the Fed Funds Rate and will probably trend lower over the course of 2024.
Mortgage rates are currently in the mid 6% range, considerably below their high mark just a few months ago but over twice as high as they were just a few years ago.
Affordability is still an issue for most buyers. National Association of Realtors chief economist, Lawrence Yun says “Retreating mortgage rates will bring more buyers and sellers to the market and get people moving again.” He predicts that sales will rise by as much as 15 percent this year over the depressed number of sales in 2023.
The number of homes for sale has been extremely low throughout 2023. There is only a 1 1/2 month supply of homes for sale, so it remains a strong seller’s market. A 5 to 6 month supply results in a balanced market. Affordability and a constricted supply of homes resulted in only 494 Redondo Beach homes changing hands in 2023, 45% lower than when the market was roaring in 2021.
Bottom line, if you want to sell your home, you’ll be able to do it fairly easily. With so few homes on the market, well-priced homes still sell in a matter of days or weeks, often with multiple offers. I welcome your inquiries regarding the real estate market and provide a no-obligation consultation regarding preparing your home for sale. Reach out to me, I’m optimistic about 2024 and ready to work hard for you. All the best in the new year!