Home News Home Trends

Is Relief Coming for Homebuyers Next Year? Zillow Shares Their 2024 Predictions

Zillow’s economists have been hard at work, anticipating what 2024’s housing market might look like for prospective buyers, sellers, renters, and first-time homeowners.

If you’re thinking about jumping back into the housing market next year, Zillow’s 2024 Housing Market Predictions report might take a little weight off your shoulders by showing you what to expect.

Graphic: Zillow's 2024 housing market predictions

Zillow

The report cautions that, though home prices are expected to fall slightly next year, you shouldn’t bring out the party hats just yet—prices are likely to drop a little bit, hovering near where they were in 2023.

This means that renting rather than buying is still an essential option to consider throughout next year.

Now that we’ve seen housing prices and mortgage rates holding their same high prices for a while, however, it’s likely that more homeowners will take the plunge and sell their homes. Since mortgage rates aren’t likely to let up anytime soon, many homeowners may decide they just can’t wait any longer to sell their home. 

exterior house paint color ideas

A Beautiful Mess

Zillow hopes that this small increase in new homes on the market will help to bring down housing prices another notch, letting up on the harsh competition we saw throughout this year.

The report also predicts that the overall cost of buying a home could loosen up, just a little. Zillow predicts the value of a home to fall only 0.2% during the next year, with mortgage rates seeming likely to stay around their current rate.

It’s possible that 2024 could ease listing prices down a bit. Though mortgage rates are extremely difficult to predict, if they do end up falling in 2024, this could lead to lower listing prices as a result. 

exterior of farmhouse home with tree in front with cute yard

Design: Mindy Gayer Design Co.

The concept of a ‘starter home’ has changed quite a lot in the past decade. A starter home could no longer entail a home purchase at all, actually.

The new ideal starter home, according to Zillow, is a single-family rental. More renters are likely to be on the hunt for these homes next year, as they’re the best way to afford more space, privacy, and safety in today’s market. 

Zillow also expects a rental surge near downtown areas during 2024. They’re modeling this prediction after the one and only New York City, which saw suburban rent prices close to the city spike higher than even urban rentals.

Though demand will be high for these types of listings, new home and rental construction in these areas makes it more likely that renters will find their new living space without worrying too much about the competition.

Loft apartment with green walls and decor

The Spruce / Alyssa Vela

If you’ve ever thought about purchasing a home that’s a bit of a fixer-upper, 2024 is the year for you. It won’t be just house flippers on the hunt for homes that need work done—those looking to own a home will be more willing to sacrifice a fully updated home in favor of lower prices.

Zillow still expects that buyers will turn to DIY home improvements instead of professional ones; with even fixer-upper homes priced higher this year than past rates, homeowners will likely be looking to save money wherever possible.

Quick fixes and renovations that are possible without the help of a professional will mark the to-do lists of new homeowners next year.

Chelius House of Design bathroom renovation

Chelius House of Design

One big leap Zillow anticipates will change the flow of the home-buying process is AI. Okay, you probably won’t be able to work with a robot realtor quite yet, but Zillow thinks that real-life realtors could seriously benefit from a little AI help.

This year has already seen real estate agents generating home models and listings using AI, so why not expand the virtual toolbox to include even more ways to list a home? 

If you want even more insider information on what to expect when buying, selling, or renting a home next year, you can view the full 2024 Housing Market Predictions report here.