6 Ways To Tell If Your Home Will Be More — or Less — Valuable in 2024
Written by
Sean Bryant
Edited by
Ashleigh Ray
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No one can predict the future, even in the housing market. However, many experts are predicting a slightly optimistic 2024 for housing.
Mortgage interest rates have already declined slightly over the past couple of months, and that trend is expected to continue throughout 2024. Just don’t expect the record low rates we saw a couple of years ago.
Additionally, home prices are expected to remain high, along with low inventory. This all adds up to predictions for a 2024 housing market that will favor sellers.
When trying to understand if your home will be more or less valuable by the end of 2024, there are a few things you can consider. While these won’t directly be able to predict the value of your house or whether it could sell for that value, they can give you a better idea of whether your home’s value will increase or decrease in the coming year.
Interest Rates
Lower interest rates generally mean financing a home is more affordable for buyers. It can also drive more buyers to want to purchase homes, but it’s far from the only driving force.
The past two years saw rising interest rates after previous record-low rates. Rates roughly doubled in 2022 and have remained relatively high since then. The average 30-year mortgage interest rate was 6.88% as of December 2023, but it hit above 8% in October 2023.
Fannie Mae, the National Association of Realtors and the Mortgage Bankers Association have all predicted that the 30-year mortgage rate will fall below 7% in the second half of 2024.
However, these are just predictions. Even if the rates decline, they likely won’t return to the record-breaking lows of 2019 to 2022. But this could be enough to sway homeowners to sell if they were on the fence or reluctant to lose their low interest rate.
Housing Supply and Demand
Housing supply and demand affect housing prices. An oversupply of houses can mean a decrease in value, while a scarcity of houses can mean an increase in value.
Housing supply was lower than demand for most of 2023. As of November 2023, there were 1.13 million homes on the market for sale, which represents only a 2.5-month supply for demand. There should be five to six months of supply to have a balanced market.
However, more new construction homes are being built, which will improve the supply if existing homeowners are still unwilling to sell in 2024.
Builders applied for over 968,000 building permits for single-family houses in October 2023, the most since May 2022. Plus, more existing homeowners may be willing to sell their homes if mortgage rates drop, adding to the supply.
Many homeowners who bought during the record low interest rates of 2019 to 2022 have been reluctant to sell and lose their rates, contributing to the low housing supply in the past few years.
“When there’s high demand and limited supply, home prices tend to rise,” said Joshua Martin, realtor and founder of Atticus Home Buyers.
“Factors like population growth, low mortgage rates and a strong economy can boost demand. For instance, if a city experiences an influx of new residents or has a thriving job market, it can drive up home prices.”
Economic Conditions
Bigger picture economic conditions of the country or region can impact the housing market. When the economy is thriving, the demand for housing is usually higher. This, in turn, drives up property values.
“Areas experiencing an influx of businesses and job opportunities tend to see an increase in home values due to heightened demand,” explained Al Lijee, founder of JunkGator. “Conversely, regions facing economic downturns or infrastructure challenges may see a dip in property values.”
Neighborhood Trends
If your neighborhood is becoming a sought-after location for buyers, it may also drive up your home’s value. People often base the selling price of their home on market comps, so if homes in your neighborhood have sold for more money, yours may as well.
Local Infrastructure
Local infrastructure can impact the value of your home. If there have been recent improvements in the infrastructure around your home, like the construction of new shopping centers or new transportation being built, the value of your home may go up.
On the other hand, if the infrastructure in your area is showing its age, buyers may be more reluctant to buy in that area.
According to Martin, “A prime location with amenities, good schools, and easy access to transportation can drive up home prices. For example, being in close proximity to popular attractions or major job hubs can make a property more desirable, thus increasing its value.”
Local Regulations
Local and state regulations like zoning regulations, property taxes and housing subsidies may impact the value of your home.
If there are strict zoning regulations in your area, building new housing may be more difficult, which means the supply could be lower than the demand.
Property taxes are calculated based on the value of the property. If your property taxes have gone up recently, this may indicate that your house’s value has gone up, too.
Of course, this doesn’t mean that your home will necessarily sell for that amount.
Whether you are considering selling your home in 2024 or not, knowing the approximate value of your home can be helpful. Looking at these factors can help you gain a better understanding of your home’s current and future value.
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