Experts: Housing market a ‘good news/bad news situation’ in 2024
ALBUQUERQUE, N.M. — The 2024 housing market is a good news/bad news situation.
The good news? Interest rates will likely go down
The bad news? We don’t have the housing supply to meet the demand.
Around town, you will see for sale signs in front of houses. Still, there are not nearly as many listings as there are folks trying to buy.
“The housing supply in Albuquerque right now is brutal. If you are looking to buy a house, you don’t have very many options and sellers know that. So, they are getting a pretty good premium for what they are selling,” said Austin Wolff, the owner and qualifying broker of the Lovely Home Company.
The bright side is the Federal Reserve hasn’t raised interest rates since September. They will likely lower rates sometime this year.
“When the Federal Reserve decides not to raise baseline interest rates, that means mortgage companies can adjust their interest rates down accordingly,” Wolff said. “The positive right now is interest rates are slated to go down slightly though 2024. The negative of that is, when interest rates are going down, prices tend to go up because demand is going to go up.”
While rates are going down, they are not going to drop all the way down to the 3% rate we saw in 2020.
That’s causing a different problem.
“Ultimately, people right now are locked into a 2.5-3% interest rate. If you are a homeowner with a 3% interest rate, even if you want to buy a new home, you aren’t going to. You are going to stay in that home because your payment is nothing essentially right now. And that makes things all the more difficult for buyers,” Wolff said.
Wolff says the only real answer right now is building more houses. There are new developments going up across town but just not fast enough.
If you are a potential homebuyer, Wolff has advice.
“For 2024, I’d say it’s best to go ahead and start your home search now. As we go through 2024, demand is going to increase and prices are also going to increase,” Wolff said.
While many experts expect the Feds to lower interest rates this year, they just don’t know exactly when that change will come.