Great Falls Area Chamber of Commerce

39 Great Falls Area Chamber of Commerce www.greatfallschamber.org H O U S I N G 2024 Great Falls Housing Market Outlook Elevated mortgage rates, high home prices and limited housing inventory are making the dream of homeownership diffi cult for Americans, according to NAR Chief Economist Lawrence Yun. Yun analyzed the current state of the U.S. residential real estate market and shared his 2024 outlook yesterday during the Memo from the Great Falls Association of REALTORS® Residential Economic Issues and Trends Forum at NXT 2023, in Anaheim, California. He explained that high mortgage rates and low inventory have dominated 2023, saying, "Twenty-year-high mortgage rates have held off home buyers. There's also a lack of housing inventory to sell, which means fewer opportunities for sales in the marketplace." Yun said that home sales will likely decline by 18% this year, compounding a 17% reduction last year. Driven by extraordinarily high interest rates, 30-year-fi xed mortgage rates remained elevated in 2023, climbing to as much as 8%. "These high interest rates have had a great impact on the U.S.' overall economic performance," Yun said. Yun also discussed high home prices. "Lack of inventory is providing the support for high prices, but it's also making it super diffi cult for fi rst-time buyers to enter the housing market." Yun said the 30-year mortgage and Fed funds rates have likely crested. "I believe we've already reached the peak in terms of interest rates," Yun said. "The question is when are rates going to come down?" Yun forecasts that interest rates will drop to between 6-7% by the spring buying season and anticipates that more sellers will enter the market. "Builders are back on their feet, up 5% in newly constructed home sales year to date," said Yun. "Builders can simply create inventory. In a housing shortage environment, builders are really benefi ting." "Pent-up sellers cannot wait any longer. People will begin to say, 'life goes on,'" said Yun. "Listings will steadily show up, and new home sales will continue to do well. Existing home sales will rise by 13.5% next year. "He reiterated the value of homeownership, stating, "Consumers are happy with real estate service. The market is fi ercely competitive and home buyers have benefi ted immensely from such wide-ranging choices in real estate services. Moreover, homeowners have accumulated sizable wealth over time." It's hard to predict what the housing market will look like in Great Falls for 2024, however our community is currently growing with an increase of new businesses which brings the need for housing whether it's rental or for sale housing. In 2022, the Governor created a housing task force who are charged with providing recommendations to make housing more aff ordable and attainable for Montanans. Recommendations may include items the legislature can consider, and the governor can sign into law, items state agencies can administratively, as well as best practices local jurisdictions can enact. As for single family home sales in Great Falls, they have declined over the prior year by 34% and the percent of list price received has come down to normal amounts to 97% of asking price. That means that normal negotiations are taking place and the cash over asking has gone away for the most part. List prices have not dropped much because inventory levels are low. The challenge of housing aff ordability is just one of the many issues the Great Falls Association of REALTORS®, the Montana Association of REALTORS® and the National Association of REALTORS® are focused on locally, across the state and the nation to continue the mission of protecting private property rights, defending consumers, and promoting the value of homeownership because that's who we "R". Sincerely, Zac Griffi n

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