Housing Market Forecast: What’s Ahead for the 2nd Half of 2024

As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.Home Prices Are Expected To Climb ModeratelyHome prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don't have housing inventory.”While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.So, getting into the market sooner rather than later could still save you money in the long run. Plus, you can feel confident experts say your home will grow in value after you buy it.Mortgage Rates Are Forecast To Come Down SlightlyOne of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):When you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price. Plus, it may help you get off the fence, if you’ve been hesitant to sell due to today’s rates.Home Sales Are Projected To Hold SteadyFor 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move. Let's work together to make sure you’re one of them.Bottom LineIf you have any questions or need help navigating the market, reach out to a local real estate agent.

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MLS PIN urges Nosalek judge to approve settlement agreement

In a legal brief filed on Monday, MLS Property Information Network (MLS PIN) made it clear that it does not agree with the Department of Justice‘s position on the banning of cooperative compensation, as outlined in the DOJ’s statement of interest in the Nosalek commission lawsuit.The DOJ became involved in the Nosalek suit in late September 2023, intervening over what it described as “significant concerns” about the terms of the settlement agreement that MLS PIN and the Nosalek plaintiffs reached in June 2023.In its most recent brief, MLS PIN stated that it had reached a “fair and reasonable settlement that fully resolves the disputed antitrust claims plaintiffs have asserted in this litigation.” It added that it believes the DOJ is effectively looking to hold a trial on the merits of the settlement.“DOJ never denies that courts should avoid deciding uncertain legal questions at the settlement stage,“ the brief states. “And DOJ even tacitly acknowledges that approving a class settlement does not require resolving good-faith disagreements as to whether the settlement perpetuates allegedly anticompetitive practices. “To the contrary, a class settlement in an antitrust action should be rejected as anticompetitive only when it perpetuates obvious ’per se’ antitrust violations under previously decided cases.”According to the reply brief, MLS PIN believes that the DOJ’s core position is that “no settlement should be approved unless it affirmatively prohibits home sellers from offering compensation to buyer-side brokers — no matter whether the offer occurs on the MLS or off it (for example, on a broker’s website).”The multiple listing service noted that the Massachusetts Supreme Judicial Court has recognized buyer-broker commissions for more than 100 years.“Not only are these practices approved; they are widely recognized as beneficial to consumers, particularly first-time home buyers and others at risk of exclusion from the housing market. It is little wonder that DOJ’s position has been met with swift criticism by experts who say that it is the ‘worst possible outcome for millions of homebuyers.’”MLS PIN also contends that “nothing in the proposed settlement between Plaintiffs and MLS PIN would limit DOJ’s ability to pursue changes to real estate market practices, in Massachusetts or anywhere else, through legislative advocacy or administrative rulemaking.”The reply goes on to state that the “entirety of DOJ’s Statement sounds in the realm of policy and should be addressed to those bodies responsible for crafting statutes and regulations: namely, Congress or the Federal Trade Commission.”Additionally, MLS PIN claims that the statistics the DOJ uses to defend its arguments “fail to measure up,” arguing that the DOJ’s “economic analysis is not replicable, and therefore, little more than junk economics.” In contrast, MLS PIN argues that the amicus briefs filed by the Council of Multiple Listing Services and Northwest MLS “provide compelling explanations for why DOJ’s policy arguments fail on their own terms.” MLS PIN also noted that it fully adopts these two briefs.Furthermore, the brief states that the policies proposed by the DOJ in its statement of interest go “far beyond what antitrust law requires,” and that they create an antitrust problem for MLS PIN, as it claims that it “cannot enter into an agreement to ban the publication of free-market compensation offers without offending the very antitrust principles DOJ claims to be protecting.“To impose such a ban through a federal injunction would also suppress speech that is protected under the First Amendment. DOJ never denies that sellers have the right to compensate buyer brokers; it only advocates arbitrary restraints on the communication of compensation offers. But the payment of buyer-broker commissions has long been legal under Massachusetts and federal law,” the reply continues. “This proposal to ban truthful and non-misleading speech made in furtherance of a lawful activity runs headlong into a string of Supreme Court cases recognizing that such bans cannot survive First Amendment scrutiny.”As a result of these perceived issues, MLS PIN argues that the court should reject the DOJ’s policy arguments and “instead advance transparency in the Massachusetts real estate market by approving the proposed settlement.”The Nosalek suit was originally filed in 2020 in U.S. District Court in Boston. The suit alleges that MLS PIN, Keller Williams, RE/MAX, Anywhere and HomeServices of America colluded to artificially inflate real estate agent commissions. Eacch of the parties have since settled the lawsuit, and the settlements reached by Keller Williams, RE/MAX and Anywhere have been granted final approval by the court.

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VA issues temporary fix to allow buyer-paid broker fees

The U.S. Department of Veterans Affairs (VA) on Tuesday issued a temporary fix that will allow homebuyers using VA loans to pay for their real estate agent’s commission — i.e., the buyer-broker fee.The change, a result of the National Association of Realtors’ (NAR) commission lawsuit settlement agreement, was anticipated late last month and commented on by Michelle Corridon, the deputy policy director at the VA. She said that a circular would be issued while the agency is engaging in a formal rule-making process.“Before that settlement takes effect, VA has announced an update to help ensure that Veterans using the VA-guaranteed home loan benefit remain competitive buyers,” Valery P. Behr, program analyst at the department’s Loan Guaranty Service and Veterans Benefits Administration, said in a statement.“Specifically, eligible Veterans, active duty service members, and surviving spouses who use their VA home loan benefits can pay for certain real estate buyer-broker fees when purchasing a home.”The circular is effective Aug. 10, 2024, and is valid until rescinded. The VA said it will develop a more permanent policy “as the real estate brokerage market restabilizes and new practices take hold.”Before the change, the VA policy stated that a veteran “may not, under any circumstances, be charged a brokerage fee or commission in connection with the services of such individuals.”The limitation would have been problematic since, according to the NAR settlement agreement, listing brokers will not be allowed to make blanket offers of cooperative compensation to a buyer’s agent on an MLS platform. Buyers will also be required to sign a representation agreement outlining the amount they will pay their agent for their services.According to the VA’s temporary fix, payment to buyer brokers on VA loans will be subject to certain safeguards, such as the requirement that all buyer-broker fees charged to veterans “must be reasonable and customary within local markets.”The VA also clarified that veterans can still ask sellers to cover these fees. “The full impact of the settlement is not yet certain because the real estate market is still adjusting, but there may be an increased expectation that home buyers will pay for their own buyer-broker fees,” Behr said in the statement. “In VA’s program, it has been common practice for sellers to pay for the Veteran’s buyer-broker fees.”  “Veterans using VA home loan benefits can now pay reasonable and customary amounts for certain charges — including commissions and other broker-related fees — thus ensuring that they remain competitive in the rapidly changing housing market,” Josh Jacobs, the VA’s under secretary for benefits, said in a statement.Trade groups, which previously voiced concerns that VA borrowers would be disadvantaged amid the NAR settlement, welcomed the changes. The Mortgage Bankers Association (MBA) said that for months, it “has pushed the VA to address this prohibition, and it is pleased there is now a temporary measure to address it.”“We now urge the VA to permanently amend its regulations to allow Veteran borrowers to pay reasonable and customary fees and commissions to retain agents that will represent their interests in the transaction.”NAR President Kevin Sears said in a statement that the “VA’s home loan guaranty is the only program that explicitly bans buyers from directly paying for professional real estate representation.”“We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market,” Sears said.  The Community Home Lenders of America (CHLA) echoed these sentiments in a statement from executive director Scott Olson.“CHLA wholeheartedly supports this update by VA which will allow veterans and active-duty service members to fund Realtor ‘buyer’s broker’ commission fees when purchasing a home with a Veterans Affairs (VA) mortgage loan,” Olson said. “CHLA recently wrote a letter calling for this action. We look forward to working with the VA and other stakeholders on ways to help veterans participate in the homebuying process.”

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