Mississippi Housing Market: Trends and Forecast 2024-2025

The Mississippi housing market presents a picture of balance and subtle shifts, offering both potential and considerations for those looking to buy or sell real estate. As of August 2024, Mississippi witnessed a 2.6% year-over-year increase in home prices. However, this upward trend is accompanied by a 7.0% decrease in the number of homes sold and a 15.5% rise in the number of homes for sale (Redfin). This suggests a possible shift from a seller's market to a more balanced environment, potentially tilting in favor of buyers in the future.

Mississippi Housing Market Trends

Several factors contribute to the dynamics of the Mississippi housing market:

• Economic Factors: The economic well-being of Mississippi, encompassing job growth, consumer sentiment, and inflation, significantly impacts the demand for housing and overall market activity.
• Interest Rates: Changes in mortgage interest rates play a crucial role in housing affordability. As interest rates rise, borrowing costs increase, potentially affecting buyer demand.
• Inventory Levels: The availability of homes for sale is a critical determinant of market trends. A high inventory generally favors buyers, providing more choices and potentially leading to price adjustments, while a low inventory creates a seller's market, often resulting in increased competition and higher prices.
• Migration Patterns: Population shifts and migration trends can significantly impact housing demand in specific regions within Mississippi. Areas experiencing population growth often see increased demand and rising home values, while areas with declining populations might experience slower sales and potential price adjustments.

Mississippi Home Price Trends

• Long-Term Appreciation: Over the long term, Mississippi has experienced significant home price appreciation. From 2000 to 2024, home prices have increased by 116.43%, for an average annual rate of 3.27%. This rate is higher than the national average (Neighborhoodscout).
• Recent Slowdown: However, more recent data suggests a potential slowdown. In the latest quarter (2023 Q4 to 2024 Q1), home prices actually decreased by 1.05%, resulting in an annualized rate of -4.14%. This is lower than the national average.
• Potential Shift: This recent decrease, coupled with other market indicators from our conversation history (such as a decrease in homes sold and an increase in homes for sale), suggests that the Mississippi housing market may be shifting away from a strong seller's market towards a more balanced market.

Mississippi Housing Market Forecast

The Mississippi housing market is currently experiencing modest growth, with the average home value up 0.6% over the past year. As of September 30, 2024, the typical home value in Mississippi is $179,894. However, a closer look at the MSA forecasts reveals a mixed picture for the future.

MSA Forecasts: A Tale of Two Markets

Growth Potential:

• Oxford, MS MSA: The Oxford MSA stands out as a beacon of potential growth, with a projected increase of 0.7% by September 2024, 0.4% by the next quarter (November 2024), and a significant 2% by August 2025. This suggests sustained positive momentum in this particular market.

Declining Markets:

• Several MSAs are predicted to experience a decline in home values over the coming year. Notably, the Greenville MSA faces the most significant projected decline, with estimates of -3.1%, -7.7%, and a staggering -16.6% by September 2024, November 2024, and August 2025 respectively.
• Other MSAs with notable projected declines include:
  • Meridian: -4.6% by August 2025
  • Laurel: -4.4% by August 2025
  • Cleveland: -11.7% by August 2025
  • Indianola: -8.4% by August 2025
  • Clarksdale: -10.9% by August 2025

Modest Fluctuations:

• The remaining MSAs are expected to experience relatively modest fluctuations in home prices, with declines generally remaining below -5% by August 2025.

Will Home Prices Drop in Mississippi? Will There Be a Crash?

While the average home value in Mississippi has increased slightly by 0.6% over the past year, reaching $179,894, future trends suggest a potential decline.

• Negative Forecast: As mentioned earlier, most MSAs in Mississippi are projected to experience a decrease in home values. This means that home prices are likely to drop in these areas.
• Oxford Exception: Oxford, MS is the only MSA with a positive forecast, suggesting potential price increases in that specific market

While some MSAs are projected to experience price declines, it's important to note that the overall Mississippi housing market is not expected to crash. The current forecasts suggest a period of correction and adjustment in certain areas rather than a widespread collapse.

Is It a Buyer's or Seller's Housing Market?

It is currently trending toward a buyer's market in Mississippi. This is because:

• Negative Forecast: Most MSAs in Mississippi have a negative forecast, predicting a decrease in home values in the coming months. This suggests that sellers may have a harder time getting their asking price as buyers become more hesitant.
• Sales Below List Price: In August 2024, 64.7% of homes in Mississippi sold for a price below their list price. This is another indicator that buyers have more negotiating power in the current market.
• Increased Inventory: The Mississippi Housing Market Overview from Zillow shows 9,929 homes for sale, indicating a reasonable amount of inventory for buyers to choose from.

Is Now a Good Time to Buy a House?

Whether now is a good time to buy a house in Mississippi depends on individual circumstances and risk tolerance.

Factors favoring buying now:

• Potential Price Decreases: The negative forecast for many MSAs suggests that buyers may be able to find homes at lower prices in the coming months.
• Buyer's Market Conditions: The current market trends, including the high percentage of homes selling below list price, indicate that buyers have a good opportunity to negotiate favorable deals.

Factors to consider:

• Location: The housing market in Mississippi is not uniform. While many areas have a negative forecast, Oxford, MS has a positive outlook. It's important to research specific areas of interest.
• Financial Preparedness: Buyers should ensure they are financially prepared for a potential decline in home values. It's essential to have a stable income, a solid down payment, and a manageable mortgage.
• Long-Term Perspective: Buying a house should be considered a long-term investment. Even if prices decline in the short term, a well-chosen property in a desirable location has the potential to appreciate in value over time.