2024 Industry Information Report

While 2023 was marked by a degree of uncertainty, current signs point overall to a more stable (and more predictable) housing market in the year to come. While industry experts disagree to some extent about certain aspects of next year’s market, current indicators do suggest that investors would be safe to approach 2024 with optimism.

Starting with the economy, the data shows that the U.S. economy in 2023 outperformed the previous year’s expectations along three key dimensions: growing economic output, labor market resilience, and slowing inflation. In fact, the U.S. is unique among advanced economies in the strength of our GDP recovery, showing levels that would have been in line with pre-pandemic trends. For example, unemployment has held relatively steady throughout 2023, increasing only slightly to 3.9% compared to 3.7% at this time last year. Wage growth, on the other hand, rose significantly in the same period, increasing 4.8% for the 12-month period ending in September 2023. As predicted, workers in a number of industries have continued to leverage their collective bargaining power to win wage increases. This is a trend we expect to continue in 2024.

Inflation is another key indicator that shows the current strength of the U.S. economy. After reaching a high of 9.1% in 2022, the inflation rate declined throughout the year to 3.7% at the end of 2023. While this is still above the Federal Reserve’s target of 2%, the rapid slowing of inflation is a positive sign for investors. Market experts are expecting inflation to remain near current levels through at least 2026, with the price of goods and services appearing to level off for the near future.

Despite these positive economic indicators, however, interest rates continue to be a pain point for many real estate investors. As of the end of 2023, the federal interest rate was 5.25% to 5.5%. The Federal Reserve raised interest rates 11 times between March 2022 and July 2023, when it finally hit pause on any further increases for the year. This pause may be an indicator that Fed officials expect the economy to slowly return to target inflation rates, and if that is the case, projections are that rates will slowly decrease as well. However, interest rates are not expected to drop below 5% in 2024.

Housing affordability, too, is mostly unwelcome news – but with a potential silver lining. Year-over-year, housing payments have increased over 15% in 2023 alone, an alarming increase. In 2021, the average U.S. monthly mortgage payment was about $1,600; in 2023, it was over $2,600. Some experts have noted that the market has never experienced such fast increases in prices and rates in such a short period of time. The National Association of Realtors’ housing-affordability index shows another year of double-digit declines (following the same in 2022) in all four regions. The Midwest had the biggest decline of 29.2%, while the West had the smallest at 11%. Overall, housing affordability in the U.S. is the worst it has been since 1984. For investors, this may result in difficulties finding affordable rental properties to buy. On the other hand, however, increasing numbers of would-be homebuyers priced out of the market may result in higher demand for long-term rental homes in 2024 and beyond.

Contributing to high home prices, construction starts have continued to slow. Year-to-date through July 2023, total construction starts were 7% below that of 2022. Residential and nonresidential starts were down 21% and 7% respectively. As predicted, construction starts struggled in 2023 due to continuing supply chain issues, inflation, and high interest rates. Still, builders are generally optimistic about the next few years, which may indicate a coming increase in residential construction starts in 2024.

In addition, national rent price growth has continued to soften in 2023, leading to declines in several major markets. After rapid spikes in rental rates in 2021, most metro areas were showing declines in median rent prices in 2022. With one exception – New York City – this trend has continued through 2023, and experts are warning about negative rent growth in many markets for 2024. Experts suggest that this is a natural “renormalizing” of most rental markets now that pandemic-era spikes are behind us. At the same time, national vacancy rates for rental housing have increased only slightly, up from 6.0% in 2022 to 6.6% in 2023. Despite softening rental rates, however, vacancies are expected to remain stable throughout the coming year.

Overall, rental property owners can expect to see steady demand for rental properties in 2024. While factors like local market conditions, inflation, and housing affordability will continue to influence each region of the country in different ways, calming economic conditions may provide investors with unique opportunities in the coming year. With more stability expected in the real estate market, investors will be better able to plan and to rise above the current challenges of the market.


Unemployment and wage growth: https://www.bls.gov/news.release/pdf/empsit.pdf


Inflation: https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm

U.S. National Home Price Index: https://fred.stlouisfed.org/series/CSUSHPINSA

New construction: https://fred.stlouisfed.org/series/HOUST

Housing affordability: https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index


Interest rates: https://www.businessinsider.com/personal-finance/best-mortgage-refinance-rates-today-sunday-5-2023-11



National rent growth: https://www.zumper.com/blog/rental-price-data/

Vacancy rates: https://fred.stlouisfed.org/series/RRVRUSQ156N

Renter household demographics: https://www.census.gov/housing/hvs/files/currenthvspress.pdf

National Housing Market Forecast: https://www.bankrate.com/real-estate/housing-market-2024/



Trends and stats: https://themortgagereports.com/107263/housing-market-predictions

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