Predicting the housing market is complex and influenced by numerous factors. While perfect accuracy is impossible, our analysis focuses on the primary market-driving factors for enhanced accuracy.
The current prediction for Q1 2024 shows the housing market getting slightly worse. Economic factors, such as softening inflation, were positive signals. However, low housing inventory with no indication of getting stronger mixed with high rates keeps the prediction low.
Our predictive model includes the following:
- Federal Reserve policy: Interest rate hikes directly impact mortgage rates, which significantly affect affordability and buyer demand. Our model accounts for tge Fed’s policy decisions and projections for future rate changes.
- Inflation: Rising inflation reduces purchasing power and can dampen buyer enthusiasm. We track inflation trends and forecasts to assess its potential impact on the market.
- Economic growth: A strong economy generally fuels housing demand. We analyze GDP growth projections and unemployment rates to gauge overall economic health.
Housing market dynamics:
- Inventory: We analyze inventory levels and trends. Low inventory creates a seller’s market, but rising inventory indicates a shift towards buyers.
- Demand: We monitor indicators like buyer search activity and pending sales to gauge buyer demand.
- Prices: We track median and average home prices nationally to understand pricing trends and potential fluctuations.
- Industry reports: Utilize reports from reputable housing market research firms to gain insights from leading experts.
What We Don’t Include:
We don’t include local factors like population growth, job market trends, and infrastructure development, which can significantly impact the regional housing market.