6 housing market predictions for 2024 from Zillow

(KRON) — More homes will hit the market next year and the cost of buying a home could level off somewhat, according to a new report. Artificial intelligence will also have an impact on how home-shoppers search for homes, and how agents list them, according to the report from Zillow.

More homes on the market

More homes are expected to hit the market, the report said, as homeowners accept that mortgage rates aren’t likely to fall any time soon. More homeowners who locked in long-term payments when rates were near all-time lows are expected to list their homes for sale as they get impatient with waiting for historically low rates to return.

Nearly two dozen Bank of America branches closing across Bay Area

More homes on the market spells good news for home buyers, according to Zillow.

Home buying costs to level off

Affordability will remain the top concern for potential home buyers next year, Zillow said. But Zillow’s forecast calls for home values to hold steady and even fall ever so slightly.

“The cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do,” the report states.

That would allow time for wages and buyers’ savings to catch up with the market.

Single-family rentals will be the new starter home

Despite this slight improvement, many households will remain priced out of the market. That will see demand and prices for single-family rentals continue to increase.

“One possible path to more single-family rental inventory is homeowners deciding to turn their homes into an investment property and rent it out rather than selling it when they move,” the report states. “The ultralow mortgage rates held by existing homeowners make it more likely that this option would pencil out.

Markets to follow NYC’s lead with rental demand surging downtown

In New York City, demand is surging for rentals in commutable areas with easy access to Downtown and Midtown Manhattan, according to Zillow’s data. Zillow predicts that more markets will follow suit with rental demand surging near downtown centers.

Traditional home buyers to compete with flippers

The types of homes typically sought by flippers — homes that need a bit of work — will see increased interest from traditional home buyers, according to Zillow.

“Though Zillow predicts more homes will hit the market in 2024, inventory will remain much lower than pre-pandemic norms,” the report said. “Faced with limited choices, buyers will be willing to overlook small flaws, such as an outdated bathroom or kitchen.”

AI will impact home searches

AI advancements will streamline both the home-buying and home-selling experience next year, according to Zillow.

“Expect home shoppers to benefit from generative-AI-powered experiences to glean valuable insights and guidance on home financing,” the report states.

For the latest news, weather, sports, and streaming video, head to KRON4.