Staten Island Real Estate

Are Housing Prices Dropping in 2024?

  • George K. Wonica Sr.
  • 02/12/24

The state of the real estate market has been a hot topic in recent news. Unfortunately, all signs have indicated that the market is slower than it's been in years. While interest rates climbed and home prices soared throughout 2023, many homebuyers opted to wait for more favorable conditions before buying or selling their home. Many people are wondering if 2024 will have a different climate. Specifically, many are wondering if home prices are expected to drop in 2024.

The reality is that making predictions about the real estate market is difficult in the best conditions and nearly impossible in challenging times. However, with a recent 1% drop in the interest rate set by the Fed, mortgage conditions are better than they were in the second half of 2023.

The combination of rising real estate prices and mortgage rates created conditions that made consumers feel homes were unaffordable. But 2024 is expected to have more home purchases than 2023, which may result in home prices continuing to increase, as some experts anticipate.

Despite this, other real estate analysts have noted that nearly two-thirds of existing home mortgages have an interest rate below 4% and are unlikely to give that up to purchase a new home at a significantly higher rate. Additionally, few people believe that the Fed will make additional slashes to the interest rate to compensate for inflation. These conditions may put a damper on home sales in the coming spring.

Given these circumstances, it may be a period of stable movement without a huge increase or decrease in home sales and prices. It will be marked by ongoing consumer uncertainty and a reluctance to make a purchase unless more favorable lending conditions emerge. In many instances, a stable market can be favorable for many buyers or sellers, as it provides opportunities for them to sell and buy without being priced out of the market.

The Impact of Rates on Staten Island Real Estate

The rates are still high, with an average of 6.7% for mortgages, which is much lower than in October 2023, when the rate was 7.8%. Since the Fed's latest 1% rate cut, the average homebuyer can have a $40,000 increase in their purchasing power compared to prior to the cut. This may offset the lukewarm interest in purchasing a home that persists in many areas of the nation.

The national real estate market conditions will likely be mirrored in New York, including Staten Island. At the end of 2023, New York saw an average of a 0.3% decrease in home prices compared to 2022. This means there isn't a major drop to recover from, and the tepid real estate market won't drive prices to dramatically increase.

This stable market can be a good time to make a move for many homeowners and first-time homebuyers. With all signs pointing to no dramatic changes in 2024, you can take the time to find a home you really like and shop for the right lender. There is decreased competition with fewer buyers, which increases the likelihood of securing the right home without a bidding war. Some savvy buyers are leveraging these conditions to find the right home now, knowing they can refinance into a better rate when the time is right. Your Staten Island realtors can help you walk through this process, finding you the right home now at a price that is favorable to your budget.

There is no way of knowing for certain what 2024 will bring, but to learn more about whether buying or selling a home on Staten Island is the right move for you, contact Wonica Realtors today!

Wonica Realtors & Appraisers are Staten Island's #1 independent full-service real estate firm, serving the needs of the community for over 30 years. Whether you are buying, selling, renting, or relocating, our staff of highly trained professionals will provide quality realty services with personal attention to your individual real estate needs.

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We help you understand the market and where to price your home for a fast sale. Our REALTORS® are familiar with the trends so they can help you appeal to a variety of potential buyers.