Pueblo County Housing Market 2024 Introduction
After a few years of home prices skyrocketing due to low mortgage rates and a lack of homes for sale the economic pressure of rising inflation and the subsequent rise in mortgage rates the market for homes sales in 2023 stayed pretty much stagnant. Not so surprisingly with the understanding of supply and demand home prices didn’t move much in 2023.
Now with interest rates easing a bit, unemployment, inflation and wages moving in the right direction, 2024 will see a rise in more buyers entering the market to buy a home. Home sellers can anticipate more showings and less time to sell their home.
Sales of previously owned homes in 2023 nationally dropped to their lowest level in 28 years as interest rates kept many would be buyers out of the market and many existing homeowners in their homes.
Nationally, existing home sales slid 19% in 2023 from the prior year, the lowest level since 1995 and 11.9% in Pueblo County.
In Pueblo County we saw an increase in the median home price go from $210,000 at the end of 2019, pre-pandemic, to $307,150 at the end of 2023. That’s a 31.6% increase in home values over the past 3 years.
Mortgage Interest Rates
No other single phrase captivated the mortgage industry and home sales like “the mortgage rate locked-in effect.” The idea that homeowners are reluctant to sell their homes because their current mortgage rate is lower than the current market rate.
In 2023, mortgage interest rates experienced fluctuations. They rose to a high of 7.79% in October but cooled down in subsequent weeks. By the end of the year, rates had fallen to around 6.61-6.96% on average for a 30-year mortgage. The National Association of Realtors forecasts rates to dip below 6% in 2024, potentially boosting the housing market.
It’s essential to keep an eye on economic indicators like inflation, which can influence mortgage rates. These trends suggest that while rates may fluctuate, they have been relatively high compared to previous years. At the end of 2023 inflation was at 3.1%. Forecasters 2024 projections for inflation are on average predicted to be around 2.5% with the Mortgage Bankers Association predicting a 2.6% inflation rate, JP Morgan estimates at 2.3% and the Federal Reserve coming in at 2.8%.
Unemployment is another factor that leads to volatility in the market and 2023 closed with a 3.7% unemployment rate. Forecasters 2024 projections for unemployment are on average predicted to be 4.4%. The average expected unemployment rate in 2024 according to Fannie Mae should be 4.6% and the Federal Reserve study estimates a 4.1% unemployment rate.
Housing Market Outlook
If you’re thinking of selling or buying a home soon, you probably want to know what to expect and there seems to be some encouraging news on the horizon.
There are usually just three questions when considering the outlook in the future and they are “what’s for sale?”, “how much is that house worth?” and “how’s the market?”.
Pueblo County saw overall sales decline but prices remained steady.
In Pueblo County, the overall residential market for homes dropped a modest .9% in the median sales price to $307,150 for 2023. The number of homes sold in 2023 was down 22.4% with the number of new listings for the year down 16.3%.
Home price predictions for 2024
Fannie Mae currently sees home prices rising 2.8% year over year by the end of 2024. The Mortgage Bankers Association believes prices could rise as much as 4.1% in 2024. The National Association of REALTORS believes that existing home prices will be up a mere 0.7% in 2024. Realtor.com believes that prices will fall 1.7%.
With fewer homes on the market new construction has in some respects taken up the slack. In fact, nationwide roughly 30% of all homes for sale in 2023 were new construction when typically new home construction is 10% to 15% of the market.
The National Association of REALTORS Chief Economist Lawrene Yun forecasts around 1.04 million new single-family construction units in 2024. In contrast Robert Deitz, the chief economist of the National Association of Homebuilders predicts a number below 900,000 single family home starts.
Overall, the consensus from industry forecasts and market analysists suggest that the new home construction outlook for 2024 is positive, with expectations of growth and increased activity in the housing market.
Are you planning on buying a home in 2024?
If you’re planning on buying a home in 2024 lower mortgage rates will allow you to qualify for more but don’t expect the prices of homes to drop much. Get your finances in order. Pay off high interest credit cards starting with the highest interest rates or those cards where you have the largest balances. Consider looking at first time home buyer assistance programs where the down payment is only 3.5% of your home purchase. Also talk to a real estate professional that can help you understand the mechanics of buying a home and can offer advice on what mortgage lenders to talk to.
Are you planning on selling a home in 2024?
Many factors should be considered if you plan on selling in 2024. Consider getting a pre-listing inspection and make any necessary repairs to make your home stand out is a good first start. Clean and de-clutter the home to make sure your home stands out among the competition. Be prepared for the long haul, statistically you could be on the market as long as three months before you get a competitive offer on your home. Speak to a mortgage lender to find out what your options will be when you’re ready to move and have a budget in mind when you go looking for that replacement home. You could consider using a bridge loan which would allow you to find a replacement home and move into it while your current home is still on the market. And most importantly make sure you talk with a real estate professional that understands the market, has a track record of getting the most money out of the sale of your home with the least amount of hassles.
Bottom line in the 2024 housing market
Given all the statistics above, 2024 will continue to be a challenge for both buyers and sellers. For buyers’ affordability will remain the key factor and for sellers the lack of buyers in the market will continue to be a challenge. If rates do continue to come down, then this will spur more activity. This means now more than ever relying on a real estate professional to help you make decisions based on your circumstances will prove to be valuable in 2024.