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When evaluating real estate market trends in the second half of 2024, it’s important to remember that home prices can fluctuate. According to the National Association of Realtors, the median existing home price across the country was $426,900 in June, up 4.1% from a year ago.

Mortgage rates, asking prices and closing terms can also change, so you should consider these carefully when buying or selling a home. Research can be a valuable tool in making important decisions when it comes to buying your new home or selling your current one.

According to experts, the following is on the radar for the real estate market in the second half of 2024.

Home price trends in the second half of 2024

“You can expect high home prices in the second half of 2024 and slightly lower mortgage rates later in the year,” said Chris Hoffman, a real estate agent with over 17 years of experience.

“Potential buyers should start preparing as early as possible by saving money and improving their credit scores. Although mortgage rates are still relatively high, experts generally expect mortgage rates to drop somewhat this year. The average rate for a 30-year mortgage could be in the range of 6.5% to 7%.”

Dennis Shirshikov, head of growth at Summer, said: “I expect moderate home price growth in the second half of 2024. Economic stability and stable employment rates should support demand, but the growth rate could be dampened by rising interest rates. For example, while cities with robust technology sectors like Austin and Seattle could see higher price increases due to continued demand, more balanced markets could see more modest gains.”

Changes in buyer and seller behavior

Hoffman said some sellers need to be more flexible with their asking prices – or closing conditions – to attract buyers.

“Be prepared to negotiate and consider offering incentives if necessary,” he recommended. “Buyers should not expect a return to pre-pandemic bidding wars. The market will likely favor a more measured approach. Be patient, do your research and don’t make hasty decisions.”

Shirshikov said buyers would likely prefer to play it safe, especially if interest rates climbed and affordability became an issue.

“Sellers, on the other hand, may be more inclined to list their properties before prices rise further, creating a more competitive market,” he explained. “For example, we could see an increase in properties offered in suburban areas as sellers capitalize on still-high demand from remote workers seeking more space.”

Impact of interest rates and mortgage availability

“Higher interest rates will undoubtedly impact the real estate market as they reduce buyers’ purchasing power,” Shirshikov added. “This could lead to a slowdown in real estate price growth as demand weakens.”

“However, mortgage availability remains critical. Tighter lending standards could further limit buyer activity, while accessible financing options could help cushion some of the interest rate impacts,” he continued.

Forecasts for housing stock

Shirshikov said that while housing inventory is likely to remain tight, there may be a slight increase in housing inventory as more sellers enter the market in anticipation of higher interest rates.

“This gradual increase in inventory could provide some relief to buyers, but it is not enough to drastically change the supply and demand dynamics,” he explained. “In areas like the Sun Belt, where new construction is more feasible, inventory could see a more significant increase.”

Changes in the rental market

Hoffman said that with the increase in the number of renters among Millennials and Generation Z, there is a growing need for rental properties that offer comfort, affordability and amenities tailored to modern living standards.

“In addition, economic factors such as job mobility and insecurity have contributed to certain segments of the population preferring renting to owning,” he said.

Shirshikov said the rental market is expected to remain stable as higher property prices and interest rates encourage potential buyers to continue renting.

“This trend is particularly evident in urban centers, where renting is still cheaper than buying,” he explained. “In addition, in cities with strong labor markets and thriving economies, demand for rental properties is likely to increase, maintaining upward pressure on rents.”

Advice for home buyers or sellers

Hoffman said that because of the dynamic nature of the real estate market, you should make sure your finances are in order — and also be prepared to act quickly, whether you’re buying or selling a home.

Shirshikov said prospective homebuyers should focus on their financial preparation by having a solid credit score and getting pre-approved for a mortgage because it can give them a competitive advantage.

“Buyers should also consider less conventional mortgage products that may offer lower initial interest rates,” recommends Shirshikov. “For sellers, it’s a good time to list properties before interest rates continue to rise and potentially dampen buyer enthusiasm. In a volatile market, it can also be beneficial to strategically price homes to attract serious offers quickly.”

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