Home Sales and Prices: Despite challenges like high mortgage rates and record high home prices, the housing market remains active. While sales may be down, potentially reaching the lowest level since 1993, home prices have remained resilient due to supply-demand dynamics both nationally and in Florida.

Supply Challenges: The market has been facing a significant housing unit shortage, estimated at around 5 million since 2019. This shortage contributes to the sustained high home prices, as there's still competition for available homes, particularly at lower and mid-price points. 

New construction has played a big roll this past year in creating inventory and will continue to do so in 2024. Sales for new construction homes made up a large portion of the sales in Florida in the 4th quarter due to significant rate buydown incentives.

Economic Influences: The broader economy is slowing and inflation has come down although still above the Fed Funds preferred rate of 2%. It may take some time for things to settle before the Fed makes more cuts this year.

Mortgage Rate Projections: Mortgage rates, have seen a drop for 10 consecutive weeks and are expected to decrease in 2024. This decrease is anticipated due to market predictions of Federal Reserve policy changes, possibly leading to rate reductions, making housing more affordable.

Inventory and Construction: Inventory shortages have been a significant issue, with many homeowners holding onto their properties. However, new construction is on the rise, which should help alleviate some of the inventory pressures. Life events continue to be a primary driver for housing transactions.

Seller Motivations: There's a noted pent-up demand for selling, which may activate once mortgage rates lower slightly. This indicates a potential increase in market activity once the rates become more favorable.

These insights suggest a housing market in 2024 that is adapting to economic changes, with potential for increased activity as mortgage rates adjust and new construction contributes to inventory. Buyers should expect a more inventory to come on this year but more buyer competition as rates come down. Sellers should a expect a busier second half as many buyers are waiting to see what will happen.

If you are looking to buy and sell it's more important than ever to research the market and learn what is happening in your local area. If you need help or advice, feel free to reach out. Click Here