Texas Real Estate Trends to Watch in 2024

Welcome to 2024! Last year, the Texas real estate market put us through the wringer. Whether you were a buyer trying to stomach almost 8% rates or a seller trying to adjust your home price expectations or an agent just trying to survive the shifts… it was interesting! I don’t know about you, but we’re excited to the turn the page to a new chapter and kick off the year with some fresh stats on where the current market stands and what experts are predicting.

Luckily, this upcoming year seems much more optimistic. From a dip in mortgage rates to an increase in inventory, Texas real estate is ready for some much-needed change.

As your local real estate experts, The Sales Team Realtors are here to shed some light on what to expect from the real estate market in the coming months. We’ve gathered intel from various real estate experts to provide you with 2024’s housing market predictions.

 

A LOOK AT THE CURRENT TEXAS MARKET

Before we dive too deep into 2024 housing market predictions, it’s important to note the impact of last year’s market. Overall real estate transactions for both buyers and sellers were down significantly compared to previous years.

This is due to the combination of high interest rates and an inventory shortage. Some might consider last year a real estate “Bear Market” as you would the state of the economy. However, even with the lack of sales in 2023, homeowners did not lose equity in their homes. This is because of the increasing demand for inventory as buyers flood the market and homeowners refrain from listing homes.

So even with a dip in sales and peaking interest rates, the real estate market has stayed afloat—and will continue to do so as the market shifts over the next few years.

 

PREDICTION #1 – MORTGAGE RATES WILL DROP

Mortgage rates, the topic you’ve all been waiting for. So, let’s cut right to the chase—yes, rates are expected to decrease this year. Because rates have a direct correlation to inflation rates, the FEDs have prolonged most cuts until inflation rates lower to 2% (more info). With inflation currently sitting around 3%, many experts believe mortgage rates will start a steady decline throughout the year.

The real estate experts at Buffini & Company & The National Association of Realtors (NAR) project the rates to hit the mid 6’s during July and even high 5’s by the end of the year, a significant dip compared to the 8% peak in October of 2023. While these projected rates might not look like the 3’s and 4’s of a few years ago, it’s important to remember that the record-low rates of 2020 and 2021 were artificially stimulated in response to the world-wide pandemic. We will not be making a return to such low rates in the near future, so make sure to keep this in mind when setting your 2024 real estate goals.

Here is some historical perspective:

PREDICTION #2 – MORE SELLERS & INVENTORY

If you have been waiting to sell your home in fear of affording the latest interest rates, this is the year to make your move. With interest rates projected to lower and pent-up buyer demand increasing on the daily, 2024 will offer ideal market conditions.

As for housing supply, we have the lowest inventory numbers since pre-covid—perhaps even 1993 according to NAR’s Chief Economist Lawrence Yun. With increasing demand for homes and such little supply, sellers have the most to gain in the approaching real estate market.

 

PREDICTION #3 – DEMAND FROM MILLENNIALS WILL KICKSTART HOME SALES

As for buyers, a large wave of first-time home buyers are projected to hit the market. 45.5 million people are about to enter the “household formation” stage of life.

More often than not, the main reason people seek new homes is due to a significant life change. With many millennials entering the stage of starting families and moving away from rental properties, there will be a great demand for starter homes and suburban communities.

 

SUMMARY

At the end of the day, The Sales Team Realtors are optimistic for what this year’s housing market has in store. With no housing bubbles on the horizon or the looming threat of a foreclosure crisis, we’re eager to see how a drop in rates might stimulate sellers into entering the market. Buyers, do your best to remain patient, because those rates will gradually start creeping downward, and it’s important to have an experienced agent on your side when they do.

Whether you plan to buy, sell, or invest in Midland, Odessa, or Johnson County real estate, The Sales Team Realtors are here to act as your local housing market guides.