If you have been on the market for a new home, 2023 may have felt somewhat like a rollercoaster. Last year was a year unlike any other, but what does this year have in store?
Two experts, Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research with the National Association of REALTORS® and Dr. Elliot Eisenberg, Chief Economist, GraphsandLaughs LLC, shared a look back and a look forward at Mainstreet Organization of REALTORS'® recent economic forecast event held on February 14, 2024.
Dr. Lautz called 2023 the year of "generational warfare." During the last decade, millennials made up the largest segment of home buyers – but this wasn't the case in 2023. Who took the lead? Baby boomers. This generation is taking the opportunity to move closer to grandkids and / or to buy their new forever homes, with plans to stay 20 years or more. With that, the trend toward downsizing is yesterday's news, while the purchase of newer (possibly more maintenance-free) homes is growing in popularity.
Other trends that shaped the market last year, an increase in the average age of a first time home buyer, 35, and the average age of a repeat homebuyer was 58, up from 36. There was also a rise in single women buying homes –19%, up from 11% in 1985 – and a decrease in families with children buying homes, which was 58% in 1985 and is only 30% today.
Despite changing demographics and markets, Dr. Lautz pointed out that homeownership is still where people build their wealth. The median net worth of a renter is $295,500 versus $396,200 for a homeowner.
Dr. Eisenberg spent his time sharing predictions for the year ahead, based on market indicators. If we have a recession, he said history indicates it may come at the end of the first quarter of 2024. The good news? He expects it will be quick and un-memorable, afterall, not all recessions are the same. This look into the crystal ball is based on factors, such as credit card balances, interest rates and wage inflation. Though he noted the economy is still stimulated as a result of COVID, which could increase its resiliency.
Consumers - including home buyers and sellers – are going to play a significant role in the overall economic health of the country, as other areas are weakening. He thinks with the residential housing market's lack of inventory, the sale of newly built homes will boom, so in addition to getting to know your local Mainstreet REALTOR®, connecting with a local builder might be smart, too.
The dynamics of the residential real estate and economic markets will continue to shift in 2024, but your Mainstreet REALTOR® will always have their finger on the pulse in your community. Lean on their resources, knowledge and expertise to help you sell or buy the home of your dreams.