The house prices in major cities over the next year are an interesting dichotomy. Detroit, Michigan, and Austin, Texas, represent the two extremes of the market change. Detroit is set to lead the charge in property price appreciation and Austin is expected to languish at the bottom, as per Realtor.com’s recently unveiled 2024 housing forecast.
Predictions for Detroit
In Detroit, property prices are on track to see a remarkable surge of 10.9% in 2024, outstripping the other 99 major metropolitan areas featured by Realtor.com. This growth is most enormous in the high-end sector of the property market. There are a couple of reasons that buying in Detroit seems so attractive right now.
Firstly, there’s a high perceived value in Detroit real estate, so it’s a great place to look for a bargain. But on top of that, the electric car industry is based primarily in the city. This, as previously reported by Mansion Global, has been drawing in professionals from other major cities to work at the automakers headquartered in Detroit.
The Future of Austin
At the other end of the spectrum, Austin was once also considered an automotive hotspot. It has a strong association with Tesla, and due to this, saw massive increases in property value over the past few years. However, nothing good can last forever, and now Austin appears to be on the brink of a crash. Realtor.com projects a significant decline of 12.2% in property prices in Austin over the next 12 months, and things may continue to peter downward after that, too.
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The Rest of the Country
Looking beyond these two extremes, 2024 is anticipated to usher in what Realtor.com terms as an “affordability turnaround” for the broader U.S. housing market. Prices everywhere are looking to fall over the next year, which is a good thing for those looking to buy a home! Danielle Hale, Chief Economist for Realtor.com, expressed optimism about the forecast, stating, “Our 2024 housing forecast reveals the green shoots we’ve been waiting to see in the housing market and should give buyers some optimism after a grueling few years.”
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The Drop in House Prices
On a national scale, the forecast predicts a slight fall in home prices, with an estimated decline of 1.7%. This follows a prolonged period of generally upward trajectory in home prices since 2012. The report also indicates a gradual easing of mortgage rates throughout 2024, with the average mortgage rate projected to be 6.8%.
The rates are expected to edge down further, reaching 6.5% by the end of the year. However, despite this favorable trend, existing homeowners are likely to grapple with high costs. This means there will still be much to consider financially before making a move.
The “continuation of high costs will mean that existing homeowners will continue to have a high threshold for deciding to move, but we will start to see some interest,” Hale said. Nevertheless, Hale predicts a growing interest, particularly spurred by what she terms as “moves of necessity,” driven by life events such as career changes or the expansion of families.
As Hale highlighted, “Home buyers will continue to seek out markets where they feel like they get the most out of their dollar as they look for homes that better meet their needs.”
The 2024 housing forecast can teach us some trends about the country as a whole. What’s going on in Detroit and Austin shows the extremes, but the increased affordability, lower mortgage rates, and a recalibration of housing prices could mean a more democratized housing market in the coming year.
