What higher sales numbers could mean for the year ahead
MoxiWorks predicts home sales will increase 8% year-over-year in January, which could bolster economist predictions of a rebound in 2024.
Key points:
- After a difficult year, real estate agents could see more sales activity in January 2024 compared to 2023.
- A steady rise in mortgage applications — in conjunction with falling mortgage rates — points to more buyer interest, although inventory will likely remain low.
- If rates continue to drop, it could “make for an interesting spring,” says MoxiWorks.
As real estate agents get ready to close the books on a tough 2023, they can look forward to a more promising start to 2024.
In its last Home Sales Predictor report of the year, real estate tech platform MoxiWorks estimates that 317,000 new and existing homes will be sold in January. While that would be a slow month any other time of the year — and a drop from December — it exceeds last year's numbers. If the prediction is correct, sales next month will be 8% higher compared to January 2023.
A steady rise in mortgage applications and lower interest rates "is surely going to make for an interesting spring, and year as a whole," Jordan Barrish, communications manager at MoxiWorks, wrote in the latest report.
The Home Sales Predictor uses data activity within MoxiWorks products to predict the number of sales two months into the future. The predictor estimated 388,000 new and existing home sales for November, just 5% above the actual total of 369,000.
A new tone for the new year?
Rising sales in January would support forecasts from several economists who expect to see a rebound in home sales in 2024. NAR Chief Economist Lawrence Yun is among the most bullish for 2024, forecasting a jump of around 13% in existing home sales compared to 2023.
While other economists might have slightly lower expectations, most are predicting some increase in sales, including Bright MLS (up 12.1%), Redfin (up 5%), CoreLogic (up 4%), Realtor.com (up 0.1%) and Fannie Mae ("marginally higher").
If sales do come in around 317,000 next month, the year would start off much like the pre-pandemic Januarys of 2019 and 2017, according to the data.
A good start doesn't always mean a strong year for home sales, however. January 2021 and 2022 each had around 450,000 home sales, but their paths diverged: 2021 would be remembered as a record-breaking year for sales, while 2022 took a mid-year turn as elevated mortgage rates put a halt to an overheated market.
Still, falling rates and an uptick in listings are giving many in the industry reason to hope for a stronger sales year in 2024.