2024 Home Prices and
Market Trends
Housing Market Predictions for 2024: When Will
Home Prices Be Affordable Again?
2024 Housing Predictions: Cedar Homes, Prices & Trends
Last month, home sales slowed down as mortgage rates and home prices continued to climb. In March, U.S. home prices rose by 6.5% from the previous year, marking the ninth straight month of year-over-year gains and a new record for March, based on the latest S&P CoreLogic Case-Shiller Home Price Index. The Index has hit new highs in six of the last twelve months.
Even though more resale homes are coming onto the market, the severe inventory shortage persists and shows no sign of ending soon. This low supply of houses helps prevent a market crash.
New home construction has provided some relief but hasn’t been enough to significantly close the gap in inventory.
In 2023, the new-home market outperformed the resale market. This was mainly because there weren’t many resale homes available. This trend looks set to continue for the remainder of 2024. With fewer existing homes on the market, new homes are in demand.
Affordability
Affordability is a big deal for everyone. Builders might have to offer price cuts or special deals to keep buyers interested. It’s not just about building homes but making sure people can afford them.
Cedar Homes by Cedar Designs can help you build your dream custom cedar home at up to 25% less than our nearest competitors. Plus, we offer a full warranty program to support you every step of the way. Our complete cedar home package delivers the best value in the construction industry.
Supply Chain Challenges
Supply chain disruptions have made things tricky for builders. However, the shortage of resale homes means there’s still a strong demand for new builds. Builders are working on these disruptions to meet the market’s needs.
Builder Sentiment and Construction Data
After a period of optimism for new construction at the end of 2023, builder sentiment took a hit in May. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), sentiment dropped from 51 to 46. An HMI reading above 50 means builders are generally positive about future conditions.
Permits for new single-family homes also dropped to their lowest rate since August, slipping 0.8% in April. However, home completions were up 15.4% thanks to an increase in housing starts over the past year.
Despite the limited resale inventory and high demand pushing prices up, the growth hasn’t been uniform. In some states, home prices have risen as much as 67% since Q1 2020.
Current Home Sales and Pricing Trends
Interest Rates
Interest rates have been on the rise as the U.S. Federal Reserve tries to control inflation. This affects both new and resale homes. However, the Fed took a break from hiking rates in early November 2023.
Recently, the Fed stated that there could be one interest rate reduction later this year.
High mortgage rates in April slowed the spring home-buying season, leading to weaker market activity. Inventory rose 9% month-over-month, with 1.21 million unsold homes by the end of March. Yet, there are still only 3.5 months of inventory available at the current sales pace. A balanced market typically has four to six months of inventory.
Home prices keep hitting new records. The median price for an existing home reached $407,600, up 5.7% from a year ago. However, sales of newly built single-family houses fell by 4.7% from March to April, and 7.7% compared to the previous year, according to the U.S. Census Bureau and HUD.
Affordability Challenges
With more existing homes on the market, buyers have more choices, and demand for new construction has cooled slightly. The median price for a newly built home in March was $433,500, compared to $417,200 a year ago.
Despite some builder concessions and rate buy-downs, many new homes remain out of reach for a lot of buyers. An NAHB report shows that over 103 million households cannot afford a median-priced new home.
While the housing market faces various challenges with high prices and mortgage rates, there are still opportunities for buyers and builders. Understanding these trends can help you navigate the market better in 2024.
Cedar Homes, Prefab Homes, and Post-and-Beam Homes
Different types of homes offer unique benefits. What makes cedar homes, prefab homes, and post-and-beam homes special?
Cedar Homes
Cedar homes are a favorite for many people. Cedar homes are admired for their natural beauty and durability. Cedar-wood has a natural resistance to decay and insects. Plus, cedar homes often feature exposed beams and a rustic look that many people love. They are also known for being energy-efficient, which is great for reducing heating and cooling costs.
According to the National Association of Home Builders (NAHB), cedar homes will stay popular in 2024, especially in areas where people love rustic, lake, river, or mountain-style living.
Prefab Homes
Prefab, or prefabricated homes, are built off-site and then put together on your land. This method offers several advantages. It’s often cheaper and faster than traditional building methods. You can also customize your prefab home to suit your needs. More and more people are choosing energy-efficient prefab homes, which are both eco-friendly and cost-effective.
In 2024, prefab homes will likely keep growing in popularity, especially with younger buyers who are looking for affordable options. They want homes quickly, and Prefab can deliver that.
Post-and-Beam Homes
Post-and-beam homes have a unique look with their exposed beams and open interiors. This style feels spacious and modern, perfect for those who love minimalist design.
Post-and-beam homes are built using vertical posts and horizontal beams. This type of construction allows for open floor plans and large windows, creating bright and airy living spaces.
With the right insulation and window glazing, these homes can be very energy-efficient, keeping your home warm in winter and cool in summer.
People looking for a distinctive, eye-catching home will find post-and-beam construction very appealing.
House Kits and DIY Building
For those who love hands-on projects, house kits are an exciting option. House kits can be a great way to save money if you’re handy or willing to hire a contractor. They come with pre-cut materials that you can assemble yourself.
However, building your own home isn’t always easy. You need to pick the right materials, get the proper permits, and be ready for any unexpected costs.
In 2024, some will dive into house kits to save money, but others might prefer hiring a professional builder to avoid the hassle and surprises.
House Kits
House kits (home packages) come with pre-cut materials, making it easier for you to assemble your own home. Whether you prefer cedar, prefab, or post and beam styles, there’s a kit to suit your taste and budget. These kits are perfect for DIY enthusiasts who want to build their dream home themselves.
Summary
Many states offer additional help, such as property tax reductions for veterans.
In 2024, the house-building industry is facing some challenges, but it’s still going strong. Cedar, prefab, and post-and-beam homes each offer unique features and sustainable options for homeowners.
Builders need to stay flexible and adapt to market changes while ensuring they meet the demand for affordable, energy-efficient housing.
Cedar homes, prefab homes, and post-and-beam construction offer lots of opportunities. Builders who stay flexible and focus on what buyers want—like efficiency, affordability, unique designs, and sustainable options—will do well this year.
If you’re thinking about building a new home, these trends are worth considering. They could lead you to your perfect home while keeping up with the latest in construction.
Economic conditions can change quickly, so both builders and homebuyers need to stay informed. By keeping an eye on market trends and choosing the right type of home, you can make smart decisions in the ever-evolving housing market.
Government Home Buying Assistance
Programs that make it easier to purchase a home.
