The previous year saw numerous changes in real estate trends, impacting market dynamics significantly. Whether you are thinking of buying or selling in 2024, it’s essential to be aware of the ongoing industry shifts, which may help you better understand how they may continue to shape the real estate landscape going forward.
The complexities of the current real estate market have driven both buyers and sellers to seek the guidance of an experienced agent. According to the 2023 Profile of Home Buyers and Sellers from the National Association of Realtor®, 89% each enlisted the expertise of an agent, highlighting the value placed on their support throughout the transaction process. Agents not only assist in strategic pricing for sellers but also aid buyers in finding the right home, negotiating deals, and connecting them with trusted professionals. This is especially useful in the face of current market challenges such as higher interest rates and low inventory.
In 2023, the market experienced rising home prices and mortgage rates, resulting in an uptick in higher-income buyers. The median household income rose 22 percent year over year, from $88,000 to $107,000, marking the largest recorded surge. Having a higher income enables these buyers to save for more substantial down payments, providing them a competitive advantage in the market.
With a median age of thirty-five, first-timers grabbed 32% of the market and their presence is expected to grow further in the coming year. Despite challenges in saving for down payments, these new buyers leveraged financial assets and loans to overcome obstacles, contributing to the growth in their numbers.
Even amid higher interest rates and housing prices, sellers continued to hold an advantage due to the inventory shortage. Reports indicate that most homes sold for the full asking price, 33% sold above the asking price, while over 75 percent of sellers didn’t need to give buyer incentives. The presence of affluent buyers, who were capable of affording higher-priced homes and offering substantial down payments, further solidified sellers’ control.
A shift in household dynamics sparked a surge in the single-buyer market. While 59% of buyers consisted of married couples (the lowest number since 2010), single buyers accounted for 29% of the homebuying market. Additionally, reports indicate that most buyers did not have children under the age of eighteen living in their households.
According to the Pew Research Center, the number of Americans living in multigenerational households—defined as two or more adult generations under one roof—has quadrupled since 1971, reaching 59.7 million. In fact, thirty percent of households have an older parent living with their adult children to receive necessary support and care or adult children (under forty years old) residing with their parents due to later marriage, extended schooling, or financial constraints preventing independent living. This trend has spurred an increased demand for larger homes capable of accommodating extended families.
On average, people who sold their homes in 2023 had lived there for ten years, and most buyers express a plan to stick with their new home for fifteen years; a significant 22 percent even expect to make it their “forever home.” Such a reluctance to move has contributed to the shortage of housing inventory. The majority of those willing to consider a move would do so for reasons such as downsizing, relocating for employment, or requiring a larger home.
The number of buyers who opted for a new home increased slightly in 2023. They were largely driven by the desire to avoid renovation hassles and to select preferred amenities and design features though existing homes may be more cost-effective.
Armed with the knowledge of 2023 trends and your real estate agent’s guidance, you can feel well prepared to navigate the 2024 market—whether buying or selling!
