The rise in mortgage rates in 2023 — they topped out at 8% in October — brought the Triangle’s hot housing market to a grinding halt. But with rates falling back into the 6% range, sales and competition are expected to pick back up in 2024.
Mark Parker, vice president of sales at Coldwell Banker HPW’s Midtown office, says he saw 20 people in an open house for a home in Raleigh’s Glenlake South neighborhood on Saturday. That turnout over a holiday weekend has feeling optimistic heading into the new year.
“If you’d asked me that same question two months ago, I wouldn’t have had that same optimism as I do now,” Parker said. “A lot of that has to do with rates.”
As the Federal Reserve holds its key rate steady and inflation begins to moderate, mortgage rates are falling. That trend is expected to continue into 2024.
“I think it will be a very robust market,” Parker said. “We may not see quite the craziness we saw in 2022 and early part of 2023, and that primarily has to do with homes on the market.”
That craziness — record low mortgage rates combined with high demand for the few homes that came on the market — led to bidding wars and buyers lined up for open houses, especially those at lower price points.
Realtor Derrick Thornton doesn’t foresee another frenzy like that in 2024.
“I don’t believe it will be that crazy,” he said, “but it will be definitely a lot of multiple offers, a lot of excitement in the market if those rates do start to come down.”
Hunter Boyd, who helps buyers get a home loan through The Sherry Riano Team at Clear Mortgage, says that a 6% rate seemed high in 2022, but seems more reasonable now.
Boyd’s office has seen a 40% increase in the number of mortgage applications in the last month. Buyers who sat on the sidelines when rates went up are getting back into the hunt for a house.
“Usually the week between Christmas and New Years is very quiet,” he said. “This year, we had multiple new mortgage applications every day and multiple people going under contract in between Christmas and New Years.”
“We’ve seen a dramatic increase in prices coupled with the increase in rates. That diminished someone’s buying power. Now, with those rates coming down, it does give consumers much more affordability to purchase a home in today’s market,” Parker said.
As buying a home gets more affordable, there are also more available. As of Jan. 1, there were more than 7,000 homes on the market in the Triangle. Last year, there were just 2,300.
That’s good news for buyers and sellers.
The National Association of Realtors predicts the median sales price for a home will increase 3.6% in 2024 year in the Raleigh-Cary market and 5.8% in the Durham-Chapel Hill area.