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Happy New Year and Forecast for 2024

denisemiyahira

Updated: Jan 3, 2024


What a great way to start off the new year with lower mortgage rates! A quick look at the Honolulu Board of Realtors link for mortgage rates as of last week Wednesday December 27th showed the 30 year fixed mortgage in the range of the high 5% - 6%. This is substantially improved from one month ago where the mortgage rates may have peaked below 8%.



The National Association of Realtors Chief Economist Lawrence Yun presented his forecast for 2024. Please understand this is an overall forecast for the entire year with fluctuations to happen with world events and a changing economy.



The amount of sales for 2023 is on track to be one of the worst years for existing home sales in recent memory with a low of a little over 4 million sales across the United States. At the peak in 2021 just two years ago, there were 6 million sales.



Meanwhile the inventory shortage has added to the slowing of sales. There has been a decline of inventory since 2017 levels which contributes to high prices due to limited options for buyers.



Builders are picking up the pace and have shown increased sales with a 4.5% increase last year as of October 2023. This is one of the best years for new developments:




As for Mortgage Rates we hope we reached the peak of the rates and the decline is signaling a much anticipated and needed injection into the housing market. Buyers who were sidelined due to the high rates will return back to the market and demand should pick up. Will inventory increase then? Possibly, if sellers who are holding onto a 2-3% mortgage contemplate a move and feel comfortable with a mortgage of 5-6%. But inventory will remain a challlenge and there may be competition again with multiple offers for homes.



The forecast for 2024 includes a return to lower mortgage rates wih the Feds doing several rate cuts throughout the year:



Sales of homes will increase with demand returning due to the lower mortgage rates:




For a complete set of slides, please see this link to the National Association of Realtors presentation:



Before you make a move in real estate, call me and I can provide a market analysis and guidance on what options would work best for you!

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