Introduction

As the year 2024 unfolds, concerns about a potential housing market crash have been circulating in the media and among investors. However, it's essential to approach these predictions with a healthy dose of skepticism and rely on data and analysis to assess the likelihood of such an event. In this blog post, we'll delve into the factors that make a housing market crash in 2024 highly unlikely and support our argument with data.

1. Steady Home Price Growth

One of the key indicators of a healthy housing market is the trajectory of home prices. Historically, housing market crashes have been associated with sharp declines in home values. However, the data from recent years tells a different story.

According to the Case-Shiller Home Price Index, which tracks home prices in 20 major U.S. cities, home prices have been steadily increasing since the Great Recession. In fact, the index reached record highs in 2021 and continued to rise in subsequent years. This consistent growth suggests a resilient housing market rather than one on the brink of a crash.

1. Low Mortgage Rates

Another crucial factor to consider is mortgage interest rates. Low mortgage rates stimulate demand for homes, making it more affordable for buyers to enter the market. In response to economic conditions, central banks and governments have kept interest rates historically low. The 30-year fixed-rate mortgage, which serves as a benchmark for homebuyers, has remained remarkably low throughout the past few years.

Low mortgage rates not only encourage homebuying but also incentivize refinancing, which can free up additional funds for homeowners. This stability in borrowing costs contributes to the overall strength and resilience of the housing market.

1. Strong Economic Fundamentals

A robust economy is a pillar of a healthy housing market. In 2024, several economic factors support the stability of the housing market:

• Job Market: A low unemployment rate and job growth are positive signs for housing. As of our last data update in September 2021, the U.S. unemployment rate was gradually declining, and job creation was on an upward trajectory.

• Consumer Confidence: High levels of consumer confidence often correlate with increased homebuying activity. A confident consumer base is more likely to make significant financial commitments, such as purchasing a home.

1. Housing Supply and Demand Balance

A housing market crash is often preceded by an oversupply of homes, which drives down prices. However, as of our last data update, many areas in the United States were experiencing a housing shortage. A lack of housing inventory compared to strong demand is more likely to put upward pressure on prices than lead to a crash.

Conclusion

While predictions of a housing market crash in 2024 may make headlines, it's crucial to base our understanding on available data and economic indicators. The data-driven perspective suggests that a housing market crash in 2024 is highly unlikely. Steady home price growth, low mortgage rates, strong economic fundamentals, and a housing supply-demand imbalance all point to a market that remains resilient and stable.

However, it's essential to monitor economic conditions and housing market trends as the year progresses. Real estate markets can vary significantly by region, so local factors should also be considered. As of the last available data in September 2021, the overall outlook for the housing market in 2024 appears favorable, with a housing market crash appearing increasingly improbable.