BiggerPockets Real Estate Podcast

867: Zillow and Redfin Top Economists Give Their 2024 Housing Market Predictions

Jan 3, 2024

Senior economists from Zillow and Redfin provide 2024 housing market predictions and discuss the weakening American consumer, affordability correction, mortgage rates, riskiest real estate markets, and affordable markets to watch. They also explore the impact of the macroeconomic situation, expiration of tax cuts, and the state of the average American consumer. The podcast includes insights on deal sponsors and optimism in the housing market despite concerns about affordability. The specific case of Austin, Texas is highlighted, along with an overall discussion of housing market predictions and the hosts' gratitude for the economists' insights.

52:31

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Episode guests

Orphe Divounguy

Chen Zhao

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Episode notes

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Quick takeaways

Affordability is expected to improve with lower mortgage rates and softening prices in the 2024 housing market.

The average American consumer is showing positive indicators with real income growth and low mortgage delinquencies, although uncertainties related to credit card delinquencies, student loan repayments, and the upcoming election year exist.

Real estate investors should be cautious of regional risks, but opportunities can be found in markets with robust population growth, strong demand, and relative affordability.

Deep dives

Outlook for the Economy and Housing Market in 2024

The housing market and real estate investing in 2024 are expected to have both opportunities and unanswered questions. Senior economists predict slightly slower economic growth, with GDP projected to grow around 1.4%. The Federal Reserve's control over short-term rates, but has limited control over long-term rates, making it challenging to predict 2024. However, affordability is expected to improve with rates likely to come down and prices softening. More inventory is also anticipated as sellers are tired of waiting. The economy is generally doing well, but consumer sentiment may not align with macroeconomic indicators. There are pockets of people experiencing different economic realities. Overall, the housing market in 2024 is forecasted to have an improved picture for buyers with better affordability and more choices in certain markets.

Introduction

2min

Impact of Macroeconomic Situation on the Housing Market

4min

Discussion on Potential Impact of Tax Cut Expiration on Housing Market

3min

The State of the Average American Consumer

16min

Deal Machine, Rent Ready, and Pine Financial Group

3min

Optimism and Increased Supply in the Housing Market

14min

Housing Market Predictions and the Case of Austin, Texas

7min

Insightful Conversation with Zillow and Redfin Economists

3min

With doomsday headlines and lagging consumer confidence, how should you proceed in 2024? Time to get the advice of TWO senior economists! BiggerPockets’ Dave Meyer talks with ZILLOW’s Orphe Divounguy and REDFIN’s Chen Zhao to demystify the latest US economic indicators and provide you with strategies to thrive in this year’s housing market.

We’ll get into home prices, the incoming “affordability correction,” mortgage rate forecasts, and why next year could be significantly better for buyers. But that’s not all. Both Chen and Orphe share their outlook for the 2024 economy, the state of the American consumer, and what could happen as student loans kick back in, credit card delinquencies increase, and cash reserves run dry.

Finally, we’ll end things with Chen and Orphe’s list of real estate markets to watch and the pricey areas that may see a revitalized post-pandemic boom. If you want to know what to expect, where to invest, and if the hot housing market will return in 2024, stick around!

In This Episode We Cover:

Redfin and Zillow’s 2024 housing market predictions

The “weakening” American consumer and what this means for homebuying

2024 mortgage rates, “disinflation,” and where we could end up next December

The “affordability correction” that could help home buyers get their first house

Riskiest real estate markets in America that could see HUGE price cuts

Affordable markets to watch that have had rock-solid home prices

And So Much More!

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