RALEIGH, N.C. (WTVD) -- As we welcome a new year, real estate experts are breaking down what you can expect with the housing market in 2024.
Interest rates are a big topic of conversation after sitting at roughly 8% a few months ago, they've now dropped below 7%, and many are forecasting them to dip even lower in 2024. However, it's not likely to fall to the 2-3% range like it did several years ago, which caused some chaos in the housing market.
"People were putting something like 20 bids on a home," local real estate agent Ellen Pitts of Harmony Realty told ABC11, adding that with the more moderate drop in rates this time around, she doesn't expect to see a similar frenzy in the market.
Those buyers who locked in mortgages at historically low rates are now holding on tight to those properties, causing a shortage of inventory across the country and in the Triangle too.
"That's been keeping transactions very low, and that's been the challenge for people trying to go out and buy is they just haven't found inventory in 2023 and that's kept prices fairly high and affordability very low," said business professor Eric Maribojoc from the University of North Carolina at Chapel Hill.
If rates continue to drop, Pitts and Maribojoc think it could convince some of those homeowners to list their homes for sale.
"That might be more palatable for more people to move and sell their house, put it in the inventory and then go buy another house," Maribojoc said. "I think the super majority of homeowners that have a mortgage in the United States are below 6%."
Maribojoc thinks that compared with last year, 2024 will likely be a slightly better time to buy a home between the dropping interest rates and potential for more supply.
As big companies like Apple, Google, and Meta make their move into the area in the coming years, Pitts predicts more dense housing will pop up.
"We'll start seeing a lot more dense housing, especially in places like Cary and Morrisville and parts of Raleigh. We just don't have the land anymore to build on in these kind of close in areas," Pitts said.
Though the supply of homes to buy has been relatively low over the past few years, Maribojoc pointed out that new construction of apartment buildings has increased rental supply significantly. He predicts that increased supply will keep rental rates from rising, or possibly even bring concessions.
Maribojoc believes the increase in rental supply will help pick up the slack from the lack of home inventory on the market for sale. He hopes that the potential for lower rates and increased supply in the coming year might allow some time for median income to increase in the Triangle, this would help the area avoid another housing spike if we see sharp growth in the coming years.