Zillow's 2024 Housing Market Predictions: A Shift Towards Affordability and DIY Trends

AI Enhancements, Rental Demand, and a DIY Renaissance Set the Tone

The 2024 housing market is poised for shifts, as Zillow predicts a nuanced landscape, with a slight breather for homebuyers but sustained pressure on the rental market. Key trends encompass DIY projects, the emergence of single-family rentals, and the influence of artificial intelligence (AI) in streamlining the home search experience.

1. Healing Process Begins:

  • Zillow's chief economist, Skylar Olsen, anticipates initiating a gradual healing process in the housing market.

  • Improved affordability and increased housing options are expected to benefit buyers, creating a more balanced market.

2. "Higher for Longer" Mortgage Rates:

  • Zillow economists foresee a continuation of "higher for longer" mortgage rates, leading homeowners with locked long-term payments to list their homes for sale.

  • Increasing available homes may mitigate competition, offering relief to buyers and slowing price growth.

3. Affordability Challenges Easing:

  • Despite affordability remaining a top concern, Zillow forecasts home values to hold steady in 2024.

  • The possibility of stable or decreasing mortgage rates could provide a window for wages and savings to catch up, offering potential buyers relief.

4. Rise of Single-Family Rentals:

  • Single-family rentals are predicted to increase demand and prices as families seek affordability and desirable amenities.

  • Homeowners may turn their properties into rental investments, given ultralow mortgage rates, contributing to the growth of this market.

5. Suburban Rental Demand Surge:

  • The trend of suburban rents outpacing urban rents is expected to persist, with more markets following New York City's lead.

  • Commutable areas near downtown centres are anticipated to experience surging rental demand, creating competition and driving price concessions.

6. Homes in Need of TLC in Demand:

  • Homes requiring minor renovations are projected to attract buyers, with limited inventory driving a willingness to overlook flaws.

  • The high cost of purchasing homes today makes flipping less attractive, potentially reducing competition from flippers.

7. AI-Driven Home Search Experience:

  • Zillow foresees advancements in AI, enhancing the home-buying and selling experience in 2024.

  • Real estate agents can expect new tools leveraging AI for improved efficiency, allowing more time for client interactions.

8. DIY Renaissance for Homeowners:

  • Buyers may opt for homes needing work, engaging in DIY upgrades and repairs.

  • The limited inventory and higher home prices make DIY projects a viable option for homeowners, contributing to a renaissance in home improvements.

As the housing market navigates a delicate balance between affordability and demand, AI, rental dynamics, and a DIY ethos are expected to define the real estate landscape in 2024.

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