The housing market is expected to continue to grow in 2024 and beyond. Zillow now forecasts that the national Home Value Index will rise by 4.9% from August 2023 through August 2024. However, not all cities will experience the same level of growth. Some cities are poised to see significant price increases, while others may see more modest growth or even a decline in prices.

This article will look at the 10 cities where housing prices are expected to grow the most in 2024. These cities are all located in different parts of the United States, and each has its own unique appeal. If you are considering buying a home in 2024, one of these cities may be a good place to start your search.

Housing Market Predictions for 2024

In September 2023, SmartAsset analyzed Zillow data, ranking the largest 2,000 U.S. zip codes by projected home price increases. This study unveils cities and their corresponding zip codes with optimistic home value projections. According to SmartAsset, such predictive models assist potential buyers in deciding whether to purchase now or wait for the winter months. It also provides sellers valuable insights for optimal listing timing.

Key Findings

Miami and Knoxville: Hotspots for Growth

Leading the pack, Rio Grande City, TX (78582), projects the highest home value increase at 12.3%. Knoxville and Miami neighborhoods claim four spots in the top 10. Notably, Knoxville's 37920 neighborhood may see a 9.5% growth, and the 37918 neighborhood an 8.3% increase. In North Miami, the 33161 neighborhood anticipates an 8.8% growth, followed by 8.5% in the 33162 neighborhood of North Miami Beach.

The Southern Surge

Approximately 80% of the top 50 projected home price increases are concentrated in the South. This includes Winston-Salem, NC (27105, 8.7%; 27107, 7.3%); Athens, GA (30605, 7.9%; 30606, 7.7%); Myrtle Beach, SC (29588, 7.8%); Savannah, GA (31419, 7.8%); and Charlotte, NC (28208, 7.5%).

NYC's Rising Neighborhoods

In New York City, Fort George (10040), Jamaica (11434), and Washington Heights (10032) are set to witness the most substantial growth in home values, projecting a 7% or more increase by next summer.

Across Major Cities

Several neighborhoods in major cities exhibit noteworthy growth. In Chicago, the 60623 neighborhood foresees a 4.9% increase in home values by next summer. Meanwhile, Phoenix's 85009 area expects a 6.9% growth, contrasting with San Francisco's 94121 area, projecting a mere 1.7% increase.

Noteworthy Increases in California

In San Diego, the Carmel Valley neighborhood (92130) is expected to experience a 5.3% growth, amounting to a $98,382 average price increase on the current $1.85 million home value. Other areas in California with significant price hikes include 90275 in Rancho Palos Verdes ($92,403), 92024 in Encinitas ($80,541), 92705 in North Tustin ($77,510), and 93117 in Goleta ($75,213).

Top 10 Cities Where Home Prices Will Rise in 2024

1. Rio Grande City, TX: 78582

Home values are expected to increase by 12.3% within the 78582 area code, bringing the average price from $113,368 in July 2023 to a projected $127,312 in July 2024.

2. Knoxville, TN: 37920

In the Kimberland Heights section of Knoxville, home values are expected to increase by 9.5% between this summer and next summer. This would bring the average home value up to $310,699, from the current $283,744.

3. North Miami, FL: 33161

This area of Miami is projected to see an 8.8% increase in home values by next summer, bringing the typical home value up to $501,725 from $461,145 this year.

4. Winston-Salem, NC: 27105

Home values in Winston-Salem are forecast to climb 8.7%. That would make the average home value $163,269 by summer 2024, or more than a $13,000 increase from this summer.

5. Muskegon, MI: 49442

As of July 31, 2023, home prices in the 49442 area of Muskegon averaged $158,324. This is projected to grow to $171,940 – an 8.6% increase – by the same time in 2024.

6. (Tie) North Miami Beach, FL: 33162

The average $443,856 home in 33162 could increase almost $38,000 to $481,584 in just one year if the 8.5% projection holds.

6. (Tie) Brownsville, FL: 33142

The 33142 area in Brownsville is also projected to undergo a 8.5% increase in home values. That would bring the average home to $407,316.

8. Lenoir, NC: 28645

This summer, a home in 28645 is valued at about $191,000 on average. But, it is projected to increase by 8.4% in the next 12 months, with the average value jumping to $206,894.

9. Knoxville, TN: 37918

Homes in 37918 are forecast to increase in value by 8.3%, taking the average home from $304,881 to $330,186.

10. (Tie) Post Falls, ID: 83854

With an 8.2% increase in home values, homes in 83854 would go up from an average of $483,973 to $523,659 in just over one year.

10. (Tie) Donna, TX: 78537

Homes in 78537 also have a projected 8.2% increase in value, but they are a little cheaper: Jumping from $128,844 to $139,409 over the next 12 months.

Data and Methodology: Cities were ranked based on the largest 12-month home value forecast using Zillow’s Home Value Forecast (ZHVF) metric for all homes (single-family residences, condos, and co-ops) in the top 2,000 zip codes by size. Projections were as of July 31, 2023, for July 31, 2024, and were applied to the average home value in each zip code to derive the projected average home value.

In a recent analysis, Morgan Stanley has revealed that home prices could experience a significant drop of up to 5% in the coming year if mortgage rates remain at their current 8% level. The bank's strategists pointed to the recent surge in mortgage rates, with the average 30-year fixed rate reaching a two-decade high. This rise in rates has led to concerns about the impact on the housing market and affordability.

The surge in mortgage rates is the highest cost of borrowing that mortgage applicants have faced since the year 2000. This situation is expected to worsen affordability conditions over the short term. Mortgage rates at these levels could potentially lead to home prices remaining flat by the end of the year, according to Morgan Stanley's base-case forecast. However, if these high rates persist, it could have a more significant impact on demand and subsequently on home prices.

Morgan Stanley strategists suggest that even a 5% increase in housing inventory in the coming year could lead to a 5% drop in home prices by December 2024, provided there is no increase in sales. The rising mortgage rates in 2022 and 2023 had already sidelined many buyers and sellers from the housing market, leading to a shortage of available supply and driving up home prices. However, if high rates persist, they may reverse this trend.

The Shift in Morgan Stanley's Housing Market Predictions

Morgan Stanley analysts had previously expected national home prices to fall by 4% in 2023. This pessimistic forecast was made as the housing market faced challenges. However, in a recent research note, they made a significant change to their predictions, now suggesting that housing prices could rise by up to 5% for the year. This shift is attributed to the continuous rise in mortgage rates, which reached 8%, the highest level in over two decades.

The surge in mortgage rates, coupled with the record growth in home prices during the pandemic, has created an unaffordable housing market, unlike anything seen in decades. Affordability has declined significantly, with the monthly payment on a median-priced home increasing by 27% over the past year. If calculated using the current 8% rate, this increase jumps to 38%. The result is the most severe affordability deterioration seen in decades.

The housing market is already underbuilt, and the surge in mortgage rates has led to a retreat in supply. Existing home listings hit a new low in August, while homebuilder confidence has also taken a hit due to rising mortgage rates. This could result in fewer homes being built. However, the impact on home sales is expected to be less severe than in the previous year, although it will put upward pressure on home prices in the short term.

Other Financial Institutions' Predictions About Home Prices

Morgan Stanley isn't the only financial institution with predictions about home prices. Roger Ashworth, a managing director at Goldman Sachs, suggests that despite affordability challenges, the housing market is in a relatively strong position due to a low supply of homes for sale.

He predicts a slow but steady rise in home prices, with a 1.8% increase by the end of this year and a 3.5% increase by the end of 2024. Mark Fleming, chief economist at First American, also believes that 8% mortgage rates may continue or hover around that level throughout the end of this year.

Top Factors Contributing to the Pessimistic Housing Market Forecast for 2024

Rising Interest Rates

One of the key factors behind the pessimistic housing market forecast is the continuous increase in interest rates. The Federal Reserve has been raising its benchmark rate, affecting the cost of borrowing for mortgages and other loans. Higher interest rates make it more challenging for potential buyers to afford their monthly payments and reduce their purchasing power.

Tighter Lending Standards

Banks and other lenders have become more cautious about their lending practices, especially in the wake of the subprime mortgage crisis in 2008. They now require higher credit scores, larger down payments, and more documentation from borrowers. These stricter lending standards limit the pool of eligible buyers, making it more difficult for many to secure financing for a home.

Supply-Demand Imbalance

The housing market is currently grappling with a significant supply-demand imbalance. On one hand, there is a shortage of new construction, particularly in the affordable segment of the market. On the other hand, there is an excess of existing homes, particularly in the high-end segment. This imbalance results in a situation where buyers have fewer options, while sellers must lower their prices to attract buyers.

Economic Uncertainty

Economic uncertainty on a global scale is another factor contributing to the pessimistic forecast for the housing market. Factors such as trade tensions, geopolitical risks, and slowing economic growth create instability and unpredictability in financial markets. This, in turn, affects consumer confidence and spending. Uncertainty about income and job prospects may cause potential buyers to delay or cancel their plans to purchase a home.

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Reference:

• https://markets.businessinsider.com/news/stocks/housing-market-home-prices-drop-30-year-mortgage-rates-outlook-2023-10

The U.S. housing market, despite some slowdown, remains a race for eager buyers keen on sealing property deals. A blend of soaring mortgage rates, historic lows in available homes, and determined buyers striving for homeownership has quickened homebuying across the nation.

The Rush to Beat the Competition

Nationally, the median home listing is spending 49 days on the market as of the first week of October, as per a comprehensive analysis by Realtor.com. This is only slightly less than the same period last year. However, specific regions are witnessing homes selling at a significantly accelerated pace compared to the previous year, where buyers lack the luxury of time, and sellers can expect swift transactions.

Eager Homebuyers in Diverse Markets

Realtor.com identified a mix of markets, spanning from the Northeast to the Southwest, where homes are changing hands swiftly. These include both affordable and high-priced markets, such as Buffalo, NY, and Oxnard, CA. Despite affordability challenges affecting demand, a pool of eager homebuyers is actively seeking opportunities despite the low inventory of available homes.

The Impact of Climbing Mortgage Rates

Climbing mortgage rates have stirred concerns among potential buyers and sellers. Despite this, appropriately priced homes in desirable locations continue to sell briskly. The uncertainty surrounding mortgage rates has urged buyers to act swiftly to secure homes and lock in rates before potential increases.

Top 10 Housing Markets Where Homes Were Selling Faster in 2023

1. Buffalo, NY: Leading the Speed Race

At the forefront of this trend is Buffalo, NY, where the median days on the market stand at 50. This represents a remarkable 13-day decrease from the previous year, indicating a surge in the housing market. Homebuyers in Buffalo are acting swiftly, fearing further rate hikes and aiming to secure a deal promptly.

Key Metrics for Buffalo, NY:

• Median list price: $239,900
• Median days on the market: 50
• Year-over-year change in median days: 13 days faster

With home prices considerably below the national average and tight inventory, the Buffalo market is witnessing a significant rise in demand.

2. Phoenix, AZ: A Hotspot for Homebuyers

Phoenix, despite enduring scorching desert temperatures for a significant part of the year, remains a hotbed for homebuyers. The metro has witnessed accelerated home sales, with properties selling almost two weeks faster than the previous year. Factors like minimal natural disasters and a robust real estate market contribute to this demand.

Key Metrics for Phoenix, AZ:

• Median list price: $475,000
• Median days on the market: 78
• Year-over-year change in median days: 13 days faster

Luxury homes are particularly in demand, selling faster than those below $1 million. Cash buyers dominate this segment, less affected by mortgage rate hikes, thereby keeping this part of the market active.

3. Oxnard, CA: Coastal Appeal and Rapid Sales

Situated along the Pacific coast, the Oxnard metro, including Thousand Oaks and Ventura, is known for its beautiful beaches and a thriving agricultural industry. Homes are selling swiftly, with a 7% increase in the median list price compared to the previous year.

Key Metrics for Oxnard, CA:

• Median list price: $875,000
• Median days on the market: 57
• Year-over-year change in median days: 11 days faster

Despite the higher median prices, the appeal of this coastal region attracts buyers seeking waterfront views and a pleasant lifestyle.

4. Boise, ID: A Market Rebounding

Boise, Idaho, known for its outdoor recreation and favorable climate, saw a surge in demand during the COVID-19 pandemic as urban residents sought a change. While rising interest rates caused a temporary slowdown, the market has rebounded.

Key Metrics for Boise, ID:

• Median list price: $519,900
• Median days on the market: 72
• Year-over-year change in median days: 9.5 days faster

The median home sale in this growing metro is almost 10 days faster than the previous year, reflecting a supply-demand imbalance and declining inventory, ultimately driving faster sales and rising prices.

5. Las Vegas, NV: Entertainment and Accelerated Sales

Las Vegas, a city known for its entertainment and low taxes, has long attracted retirees and individuals seeking an escape from harsh winters. Despite a history of real estate market fluctuations, Las Vegas is currently experiencing a surge in housing demand.

Key Metrics for Las Vegas, NV:

• Median list price: $449,999
• Median days on the market: 56
• Year-over-year change in median days: 9 days faster

After the housing crash of 2008 and a slowdown due to rising interest rates in 2022, the market has rebounded. Homes are now selling about a week faster than the national median, reflecting renewed demand and improved market conditions.

6. Bridgeport, CT: Affluent Living and Swift Sales

The Bridgeport metro, located near New York City, is renowned for its affluent living and attractive real estate market. Despite higher median prices, homes in this area are selling over a week faster than the previous year, indicating sustained demand amidst limited supply.

Key Metrics for Bridgeport, CT:

• Median list price: $795,000
• Median days on the market: 74
• Year-over-year change in median days: 8 days faster

Offering a mix of attractive properties, including four-bedroom homes, this metro remains appealing, especially with the rise of hybrid work models and increased flexibility.

7. Harrisburg, PA: Rapid Sales in Central Pennsylvania

Harrisburg, located in Central Pennsylvania, boasts the quickest average time-on-market among the listed places. The market here is fueled by limited inventory and high demand, resulting in homes being sold swiftly, attracting both buyers and sellers.

Key Metrics for Harrisburg, PA:

• Median list price: $309,900
• Median days on the market: 46
• Year-over-year change in median days: 8 days faster

The record low number of homes for sale in Harrisburg has intensified competition among buyers, making it an opportune time for sellers to list their properties and facilitate quicker sales.

8. Springfield, MA: Historical Charm and Affordable Homes

Springfield, located along the Connecticut River, is a city steeped in history, known as the “Birthplace of Basketball.” With a rich industrial heritage and the influence of the Springfield Armory, this city offers attractive home prices, about 25% below the national average.

Key Metrics for Springfield, MA:

• Median list price: $319,000
• Median days on the market: 53
• Year-over-year change in median days: 7 days faster

Despite rising mortgage rates, demand remains high due to these affordable home prices, making it an appealing option for potential buyers.

9. Cleveland, OH: Affordable Homes and Cultural Richness

Cleveland, situated against the southern shore of Lake Erie, is renowned for its affordability, making it the most budget-friendly metro on this list. The city offers a multitude of homes priced below $200,000, attracting a diverse range of buyers.

Key Metrics for Cleveland, OH:

• Median list price: $199,000
• Median days on the market: 48
• Year-over-year change in median days: 6 days faster

The city's economic diversification and urban revitalization initiatives have bolstered demand, further fueled by the attractive pricing of properties.

10. Portland, ME: Coastal Charm and High Demand

Portland, known for its rugged coastline and vibrant food scene, attracts buyers seeking quality living in a picturesque setting. Despite prices approximately 25% higher than the national average, homes in Portland are selling faster than the previous year, indicating sustained demand.

Key Metrics for Portland, ME:

• Median list price: $549,900
• Median days on the market: 51
• Year-over-year change in median days: 6 days faster

With a range of housing options, including waterfront properties, Portland offers a lifestyle that continues to entice both primary residence and vacation home buyers.

Looking Ahead

“Buyers are thinking, ‘I need to make an offer either the day a home goes on the market or soon after, so I can get my home and lock in a rate before it goes up,'” says Matthew Roland, assistant dean at the University of Buffalo’s Department of Urban and Regional Planning. He hopes for potential rate decreases to bolster inventory in the coming months.

Homebuyers across the United States are changing their preferences as the housing market undergoes significant shifts. Austin, once a sought-after destination, is witnessing an exodus due to soaring housing costs. At the same time, Sacramento, Las Vegas, and Orlando are emerging as the most popular choices for homebuyers, despite the increasing climate risks they face.

In a surprising turn of events, more homebuyers are looking to leave Austin, Texas, than move in during the third quarter of 2023. This marks the first time on record that there hasn't been a net inflow into the Texas capital. The rising housing costs in Austin have prompted some recent transplants to reconsider their decisions and return to their hometowns.

The data analyzed for this report is based on the searches of approximately two million users on Redfin, who viewed homes for sale online across over 100 metropolitan areas from July 2023 to September 2023. Redfin's records trace housing trends dating back to 2017.

U.S. Homebuyers' Nationwide Relocation

Nationwide, there is a significant trend of homebuyers relocating to different metro areas, which is still near record highs. During the third quarter, approximately 25.9% of homebuyers sought to move to a different part of the country. This figure remains relatively consistent with the record high of 26% observed in August. It's also up from 24% compared to the previous year and a substantial increase from the 19% reported before the pandemic.

Notably, there is a 9% decrease in Redfin.com users looking to move away from their home metro compared to the previous year, marking the most significant annual drop on record. However, searches for out-of-town homes are holding up better, with a 17% decrease in Redfin.com users searching within their home metro compared to a year ago.

Despite a cooling overall housing market, the high percentage of homebuyers looking to move to a different metro area continues, largely due to the pursuit of affordability. In fact, nine out of the top 10 most popular migration destinations offer lower home prices than the most common origin of buyers moving in.

Homebuyers' Migration to Affordable yet Climate-Risky Destinations

Sacramento, California, Las Vegas, Nevada, and Orlando, Florida, have emerged as the most sought-after destinations for relocating homebuyers in the third quarter of 2023. The popularity is determined by a net inflow, which measures how many more Redfin.com users looked to move into an area rather than leave it.

Remarkably, half of the top 10 popular destinations are in Florida, and eight of them are situated on the East Coast, even though the two most popular destinations are in the western part of the U.S. What's fascinating is that nearly all the places homebuyers are moving to are more affordable than their places of origin, which explains their popularity, even in the face of increasing climate risks.

Top 10 Metros Homebuyers Are Moving Into, by Net Inflow

Let's take a closer look at the top 10 metro areas that homebuyers are flocking to, based on net inflow, in the third quarter of 2023:

1. Sacramento, CA: With a net inflow of 4,800, Sacramento takes the top spot, attracting homebuyers primarily from San Francisco, CA, and Chicago, IL.
2. Las Vegas, NV: Las Vegas follows closely with a net inflow of 4,500, drawing homebuyers primarily from Los Angeles, CA, and retaining a strong local presence.
3. Orlando, FL: Orlando secures the third position with a net inflow of 4,000, primarily from New York, NY.
4. Myrtle Beach, SC: With a net inflow of 3,800, Myrtle Beach entices homebuyers from Washington, D.C., and maintains its local appeal.
5. North Port-Sarasota, FL: This destination reports a net inflow of 3,700, with most homebuyers coming from New York, NY.
6. Portland, ME: Portland, ME, attracts homebuyers with a net inflow of 3,500, primarily from Boston, MA.
7. Tampa, FL: Tampa, FL, showcases a net inflow of 3,400, with New York, NY, as its primary source of homebuyers.
8. Cape Coral, FL: Cape Coral, FL, with a net inflow of 3,300, draws homebuyers primarily from Chicago, IL.
9. Miami, FL: Miami, FL, reports a net inflow of 3,200, with New York, NY, as its primary source of homebuyers.
10. Salisbury, MD: Salisbury, MD, rounds out the top 10 with a net inflow of 3,100, primarily attracting homebuyers from Washington, D.C.

In summary, the U.S. housing market is undergoing a transformation as homebuyers seek new opportunities and prioritize affordability. Austin, once a bustling destination, is witnessing a surprising exodus due to escalating housing costs. In contrast, Sacramento, Las Vegas, and Orlando are experiencing a surge in popularity, despite the climate risks they face.

These trends are reflective of a changing landscape, where Americans are making calculated moves to secure their dream homes in the most promising locations. These shifts provide valuable insights into the evolving housing market, allowing both homebuyers and sellers to navigate the changing tide with confidence.

The 2023 housing market predictions by Fannie Mae provide a glimpse into a market navigating through challenging waters. Despite the hurdles posed by soaring mortgage rates, the housing market has demonstrated resilience. However, caution is essential as we move into 2024, with expectations of a slowdown.

Factors Influencing the Housing Market

The housing market is influenced by various factors, and the fluctuation in mortgage rates is a significant contributor. As mortgage rates surge past 7%, they are expected to impact the housing market in 2023 and beyond. Affordability constraints are becoming more pronounced, making it challenging for potential buyers to enter the market.

Fannie Mae's Economic and Strategic Research Group anticipates that the higher mortgage rate environment will dampen housing activity, complicating affordability into 2024. This situation is a result of a substantial surge in housing activity experienced in the years between mid-2020 and mid-2022, with much of that momentum now being reined in.

Challenges and Resilience in the Housing Market

The resilience of house prices, despite the challenges posed by higher mortgage rates and affordability issues, showcases the underlying strength of the housing market. This unexpected resilience might be attributed to a combination of demand-supply dynamics, economic policies, and evolving consumer preferences.

However, experts caution that this resilience may face a test as the mortgage rates continue to rise. The slowdown in the housing market anticipated in 2024 underscores the need for potential buyers to carefully assess their options and plan their investments.

The Federal Reserve's Role and Economic Outlook

The Federal Reserve plays a pivotal role in shaping the economic landscape. The recent swift rise in interest rates has drawn attention to the Federal Reserve's stance on rate hikes. They have conveyed a commitment to keeping rates “higher for longer” until annual inflation stabilizes at 2%. This strategy is aimed at managing inflation and ensuring economic stability.

However, this approach also comes with potential economic dislocations, as witnessed in the past with similar interest rate hikes. Economists, including Doug Duncan from Fannie Mae, anticipate a mild economic downturn in the first half of 2024 due to the abrupt rise in interest rates.

Impact on Consumer Behavior

The 7% mortgage rates are expected to have a profound impact on consumer behavior. As interest rates continue to rise, consumer consumption and business investments may slow down due to increased debt costs. This could lead to a decrease in home sales as potential buyers may reconsider their purchase decisions in light of higher borrowing costs.

Fannie Mae's research group points out that the recent rapid rise in interest rates can potentially lead to economic dislocations, even though the consumer has shown resilience. The rate hike has brought to the forefront the importance of careful economic management to ensure a smooth transition.

Long-Term Housing Market Forecast and Economic Stability

The long-term forecast for the housing market depends on various factors, including how the Federal Reserve manages interest rates and inflation. While there may be short-term challenges, experts believe in the potential for the economy to stabilize in the long run. The Federal Reserve's commitment to a “soft landing” indicates its determination to manage the economy and prevent sharp economic downturns.

However, achieving this requires a delicate balance and effective policy implementation to mitigate the impact of rising rates on the housing market and the broader economy.

The housing market is experiencing a significant slowdown, with economists predicting that 2023 will be the slowest year for home sales since the 2008 housing bubble burst. According to a recent report by Fox Business, the housing market is facing several challenges, including persistently high mortgage rates and low inventory, which are discouraging potential buyers.

Redfin, a leading real estate brokerage, has estimated that there will be only around 4.1 million sales of existing homes in the United States by the end of 2023. One of the major factors contributing to this decline is the soaring mortgage rates, which currently stand at a staggering 7.63%. These high rates are dissuading many potential homebuyers from entering the market, making 2023 one of the toughest years for real estate sales.

According to Redfin's economic research lead, Chen Zhao, “Mortgage rates are staying high longer than anticipated, keeping away everyone except those who need to move and pushing our sales projection for the year down to a 15-year low.

The current mortgage rates are the highest they've been in over two decades, which is causing a growing number of buyers to hesitate about entering the market. Recent data from the Mortgage Bankers Association reveals that mortgage applications have dropped to their lowest level since 1995, further confirming the challenges the housing market is facing.

A Stark Comparison to 2008

The situation in 2023 draws a striking comparison to the housing market crash in 2008, which was triggered by a combination of factors, including the subprime mortgage crisis, high debt levels, and a lack of financial regulation. As reported by Fox Business, this crash led to a severe economic recession that affected millions of Americans, with many finding themselves in homes worth less than their mortgages.

However, one notable difference is that during the Great Recession, plummeting home prices created opportunities for first-time homebuyers to enter the market and purchase starter homes. In contrast, the current high mortgage rates are discouraging potential buyers, leading to a stagnant market and further worsening inventory issues.

Impact on Homebuyer Demand

Redfin's Homebuyer Demand Index, which measures early-stage demand indicators such as home tours, has fallen to its lowest level in a year. This decline reflects the reduced enthusiasm among homebuyers, who are waiting for better market conditions.

Furthermore, during the four weeks ending on October 15, the housing market saw a nearly 14% decrease in available homes, as homeowners opted to hold onto their lower borrowing rates. While there has been a slight increase in new listings this fall, potential buyers may find better opportunities in the new construction market.

New Construction Offers Hope

Amid the challenging conditions in the existing home market, new construction is emerging as a more attractive option for homebuyers. According to Redfin, sales of newly built homes are holding up better than existing home sales. This is partly because builders are not constrained by low mortgage rates, and they are often more motivated than homeowners to close a deal.

In the United States, sales of new construction homes increased by 1.5% year over year last month. This comes as prices for new construction homes dropped by approximately 4%. These statistics indicate that buyers might find more favorable conditions in the new construction sector, where builders are adapting to the changing market dynamics.

In summary, the 2023 housing market is facing unprecedented challenges, with high mortgage rates and low inventory discouraging potential homebuyers. These conditions have led economists to project that 2023 will witness the fewest home sales since the 2008 housing market crash. This situation is a stark contrast to the opportunities that emerged during the Great Recession, as today's high rates are keeping more homebuyers on the sidelines.

However, amidst these challenges, new construction homes are offering hope to buyers, with sales in this sector holding up better and prices dropping. As we navigate these uncertain times, potential homebuyers may find new opportunities in the evolving real estate market.