It’s no secret that our industry faced many challenges in 2023. The market was once again shaped by rising mortgage rates, soaring home prices, and limited housing inventory. In addition to these economic factors, plaintiffs’ lawyers continued to take aim at how real estate professionals were compensated. Although our industry will face major challenges in 2024, the National Association of REALTORS® (NAR) is optimistic about what lies ahead. We remain steadfastly committed to championing homeownership, empowering our members and communities, and putting the best interests of consumers first.
Before delving into NAR’s 2024 market forecast, I would like to briefly discuss the Barnett case and copycat litigation. Because this case is rightfully a top priority for all of us in the real estate profession. I recently shared my thoughts on this topic in a USA Today article, but I want to reiterate that the NAR will not remain silent as plaintiff’s attorneys spread disinformation about the industry. I think. Far from harming consumers, real estate agents are the foundation of our communities and provide value to all of America. Our compensation is and remains negotiable, and the practice of listing brokers offering compensation to buyer brokers was established decades ago in the marketplace because it is efficient and beneficial to consumers (both sellers and buyers). It emerged organically. We uphold the benefits of cooperative compensation and will appeal this erroneous ruling and challenge similarly flawed claims made in copycat litigation.
From a market trends perspective, 2023 was met with a series of headwinds. Low inventory and high interest rates have reduced home sales by his 18%, and his 30-year fixed mortgage rate has reached 8%. However, the market has proven resilient, and NAR’s research team predicts that mortgage rates will continue to decline, potentially reaching 6.5% by mid-2024. This will result in more sellers entering the market, and the impact of development activity, coupled with a resurgence in new construction, could lead to a gradual increase in housing inventory over the coming year. NAR predicts that existing home sales will increase 13.5% next year, with the median home price reaching $389,500. This is an increase of 0.9% from 2023.
Lower mortgage rates and a potential increase in housing inventory suggest a market equilibrium in 2024, which will particularly benefit first-time buyers. As real estate agents, agents are best equipped to guide first-time buyers through the homeownership process, and NAR remains committed to empowering and supporting first-time buyers to achieve their goals. I’m here.
In line with this evolving market environment, one of NAR’s key initiatives for 2024 is Ignite Others. This is a program we rolled out in August that aligns with our broader mission to drive change in our communities and create career opportunities and economic health for all.
The initiative will feature programs aimed at deepening members’ service to their communities, such as teaching high school students financial literacy and homeownership preparation. By educating students about budgeting, borrowing, credit scores, and investing, we aim to close the financial literacy gap and help students see homeownership as an achievable goal.
We are focused on moving the industry forward. Supporting policies that strengthen property rights and market stability is our hallmark. As we continue to face economic headwinds, lawsuits based on faulty assumptions, and other industry complexities, NAR members continue to do what they do best: help millions of people achieve their homeownership goals. We are confident that we will continue to help Americans.
Tracy Kasper is President of the National Association of REALTORS®.