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The year ahead promises to offer the housing industry some relief, compared with a grueling 2023, but it is likely to be only a small bounce forward toward a healthier market. 

The housing industry, including the secondary market it feeds, is still likely to be sluggish in 2024, with marginal improvements in some sectors as others tread water or retreat slightly, industry players who spoke with HousingWire predict. 

Still, a sluggish to slightly better forecast for 2024 beats the hardscrabble path of retrenchment the industry endured in 2023. Last year, fast-rising rates and related volatility, coupled with liquidity challenges in the bank and nonbank sectors, high home prices and a shortage of housing inventory all worked together to suppress mortgage originations and the secondary market outlets for those loans as well.

“Notwithstanding the recent mortgage rate rally [at yearend 2023], housing and mortgage markets will enter 2024 at approximately the same level as they entered 2023,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in the agency’s yearend commentary. “Thus, while we think home sales will start to rise over the new year, the combination of modest increases in home prices and still-elevated interest rates suggest a slow pace of recovery from previously recessionary levels of housing activity.”

John Toohig, head of whole-loan trading on the Raymond James whole-loan desk and president of Raymond James Mortgage Co., said many of the same headwinds the market faced in 2023 remain as we roll into 2024. He said among them are higher rates (down a bit at yearend, but still in the high 6% range); “… the lack of liquidity in the banking sector; increasingly challenged affordability; and [consumer] credit starting to show some early cracks on the lower end of credit and with younger borrowers.”

Still, an interest-rate drop and soft landing for the economy, if the latter is truly achieved, will break some of the ice in a chilled housing market.

“For 2024, should the Federal Reserve determine they have overcorrected and start to lower rates [as indicated at the Fed’s December Federal Open Market Committee meeting], you will see a surge in trading volumes,” he added. “Discounts will be less impactful, loans will trade closer to par or gains again, and much of the frozen underwater coupons will transact again.

“Should credit break and the consumer buckle, [however,] you could see home prices fall, delinquencies and charge-offs on the rise and that will negatively impact pricing in a market with limited liquidity.”

It remains a guestimate game as far as when the Federal Reserve — which paused rates at its final meeting in 2023 — will decide to begin rolling back its benchmark rate in the year ahead from the current range of 5.25%-5.5%.

As 2023 moved toward a close, 30-year fixed rates had dropped into the mid-to-high 6% range. Few, if any, industry groups or market experts, however, have been accurate in predicting rates very far out in the current topsy-turvy market.

“If you look at futures, you’re looking at lower [Fed] rates by May of next year,” said Tom Piercy, chief growth officer at Incenter Capital Advisors (previously Incenter Mortgage Advisors). “I wouldn’t make a bet on it is because there’s just so much complexity in this.”

MSR sector

Piercy, whose shops advises both banks and nonbanks on mortgage servicing rights (MSRs) transactions, said the year ahead for MSRs will be impacted negatively if rates decline, but he adds rates would have to adjust downward significantly to accelerate loan-prepayment speeds, which would draw down the value of MSR packages. He said marginally lower rates would affect the returns holders of MSRs get from parked escrow accounts, however, which does impact MSR pricing.

Piercy expects that the combined MSR trading volume in the coming two years (2024 and 2025) will be on par with or slightly better than the combined trading volume of 2022 and 2023, when rates spiked and more than $1 trillion in MSR deals transacted each year.

“Over the next three years, including 2023, [we estimate] sub-$4 trillion [in MSR trades], maybe in the high $3 trillion [range], and again that’s for 2023 through 2025,” Piercy said. For 2023, slightly greater than 1.1 trillion in MSRs are expected to have traded, he added.

Part of that trading volume in 2024, Piercy said, is expected to be driven by MSR sales resulting from the continuing merger and acquisition (M&A) activity in the nonbank sector of the market.

“Unless there’s some type of pickup in the forecast for originations, I think you’re going to see still an active M&A market through 2024,” he explained. “Many shops will probably look to become part of a larger, more financially stable platform.

“We’re forecasting right now a fairly strong Q1 for MSR sales. I think it’s going to be a robust market.”

MBS sector

Robust is not the adjective to describe what’s ahead in 2024 for the agency (Fannie Mae, Freddie Mac and Ginnie Mae) mortgage-backed securities (MBS) market, however. Market observers say outsized spreads between the 30-year fixed mortgage rate and 10-year Treasuries and subpar MBS clearing rates are likely to continue, given the imbalance in supply and demand in the market as the Federal Reserve continues to unwind its $2.5 trillion portfolio of MBS. 

According to projections by real estate investment firm the Amherst Group, agency MBS net issuance for 2024 is estimated at $300 billion, up slightly from $250 billion in 2023 — but still down significantly from the barnburner year in 2021, when net issuance totaled $870 billion. Net issuance in MBS represents new securities issued less the decline in outstanding securities due to principal paydowns or prepayments.

The Federal Reserve’s ongoing quantitative easing is expected to contribute an excess MBS supply to the market in 2024 of some $225 billion, which will need to be absorbed in addition to the projected $300 billion in net new issuance. 

“Generally, our view has been that mortgages are really undervalued,” said Amherst Chairman and CEO Sean Dobson. “I’ve been doing this for 30 years, and they’re about as good in value as they’ve ever been. 

“But we don’t see a lot of snapback, with mortgages getting back in line [in terms of interest rates] anytime soon. … Mortgage rates are high and one big reason … is the [agency MBS] investor base is impaired, and it’s not likely to be fixed soon.”

Dobson added that, in his view, monetary policymakers didn’t fully grasp that when the Fed stopped buying mortgages, “they had displaced the actual buyers for so long that the actual buyers are now gone. 

“… Now you can buy billions of dollars in bonds [MBS] that are really undervalued relative to their intrinsic risk because there’s just no sponsor [a major new buyer since the Fed’s pullback].”

Richard Koss, chief research officer at mortgage-data analytics firm Recursion, also offers a bleak assessment of the agency MBS market ahead — primarily because mortgage originations are likely to remain depressed, which means agency MBS issuance will be depressed as well. 

Koss points to the huge volume of low-rate mortgages outstanding as the vexing problem the market faces, adding that low-rate legacy (2020 and 2021) mortgage-backed pools “are mostly discount bonds in the current [high] rate environment.”

“All the 4.0% and lower mortgages that dominate the market are less than four years old,” he said. “If you have a 3% mortgage, you need a 2.5% rate to justify refinancing, which is a 1% Treasury yield. 

“That could happen, but we don’t want it to, since it means some kind of disaster. I think a mortgage winter has frozen things hard and conditions are such that we can only expect a measurable improvement out past 2030.”

The Mortgage Bankers Association (MBA) estimates that total mortgage originations in 2023 will come in at about $1.6 trillion, down considerably from the $4.4 trillion in originations chalked up in the banner year of 2021. Next year, the MBA forecasts total originations at slightly more than $2 trillion — and its most current origination forecast shows only modest improvement in 2025, with originations (purchase and refinance) reaching $2.43 trillion. 

RMBS sector

The origination downturn and rate volatility in 2023 negatively impacted the private-label residential mortgage-backed securitization (RMBS) market. Many market experts, however, expect a tailwind of declining rates for the year ahead as a result of recent signals from the Federal Reserve that rate cuts are on the table, starting as soon as the end of the first quarter of 2024.

“Additional rate hikes no longer appear to be part of the conversation, MBA senior vice president and chief economist Mike Fratantoni said in a statement reacting to the most recent Fed rate decision. “It is all about the pace of cuts from here.

“…We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”

A report published in late November by Kroll Bond Rating Agency (KBRA) — which tracks RMBS offerings across the prime, nonprime, credit-risk transfer and second-lien sectors (RMBS 2.0). —  assumed that the Fed was “closer to peak interest rates.” That assumption bodes well for the private-label market in 2024 — relative to its performance in 2023.

“We expect 2024 conditions to be more favorable and RMBS 2.0 issuance levels to be slightly higher than in 2023 at $56.5 billion (a 9% increase),” the KBRA report states.

Andrew Rhodes, senior director and head of trading at Mortgage Capital Trading, said the winter months ahead are going to be rough going for the housing market, including RMBS issuance.

“I think 2024 [overall] is going to be better from a [loan] origination standpoint, but I don’t think it’s going to be large increase,” he added. “…I really do think that 2025 will be a lot better, but that’s pretty far forward.”

Tailwinds 

On a brighter note, Ben Hunsaker, portfolio manager focused on securitized credit for Beach Point Capital Management, points to the expansion of second-lien products in the primary market as a loan-origination and RMBS volume-driver in 2024, given the record-levels of home equity available to homeowners, many of whom are now locked into low-rate mortgages and have little incentive to sell or buy a new house.

“There’s this big pool of second liens and HELOCs [home equity lines of credit] that some of the originators have started to use as a key part of their toolkit, and you’re hearing them talk about it on earnings calls,” he said. “And so, I think that probably puts a kick in the pants to what 2024 [RMBS] volumes could look like.”

Charley Clark, a senior vice president and mortgage warehouse finance executive at EverBank (formerly known as TIAA Bank), also strikes a note of optimism for 2024 when it comes to the prospects for housing industry, specifically the large independent mortgage banks (IMBs) that feed the origination and securitization pipelines. Clark notes that EverBank serves about 40 of the largest mortgage banking companies in the nation.

“I think there’s definitely still some of the mom-and-pop shops [IMBs] — or let’s say a company with $20 million or $25 million or below in adjusted tangible net worth — that will be looking to sell,” he said. “But most of the big companies have solid balance sheets and have started to actually stop the bleeding. 

“I’m encouraged because these companies [large IMBs] are much better positioned now. They’ve made the cuts, at least most of the cuts they need to make to right-size for where the industry is heading. And the best companies have really done a good job of that, so they’re positioned to do well next year, but it’s still going to be tough.”

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HousingWire Editor in Chief Sarah Wheeler sat down with Kathryn Amor, senior vice president and head of enterprise products at Guaranteed Rate, to talk about the intersection of product and technology.

Sarah Wheeler: You joined Guaranteed Rate in January of 2023. What drew you to that role?

Kathryn Amor: Their amazing tech stack was a really important factor. They had really great tech — including some proprietary tech — and they were at the leading edge of creating tech around products that I wanted to launch.

SW: As a product leader, how did you think about products coming into a year like 2023?

KA: Coming into 2023, a lot of people were just thinking about survival and there was a lot of movement going on with investors. For me personally, I was walking into a new company so I was looking at: what do we have going on here? What do we need to rebuild? And how do we frame out what the future is going to look like?

I spent a lot of time doing research to understand how to position Guaranteed Rate for the future, to be a center of product excellence, and to leverage all of the technologies that have been put in place to create products and programs that we can monetize. Part of that was also having to completely reconsider how we looked at investors and how we look at sources of liquidity. It was also to find meaning in all the change that’s happening and a new north star because what worked in 2020 and 2021  — and actually for the last 10 years — isn’t what’s going to work in the future.

For me it was a lot about embracing change and how to get other people to embrace change and to see what could be done, because I think there’s a lot of negativity out there. But there’s a lot to be hopeful about. We’re on the brink of seeing that in 2024.

SW: Does this cycle remind you of any other time in housing?

KA: It doesn’t remind me of anything I’ve seen before. If anything, it’s being able to take advantage of opportunities as they’re coming in front of you, and having a more bespoke perspective. I don’t think there’s a one-size-fits-all solution to any of this. In the past, you could come up with big broad solutions that were going to solve for a large swath of people and I’m not saying that some of that doesn’t exist today. But where we differentiate ourselves is in the ability to see opportunities and to take advantage of what’s coming because we’re diversified. And we’re not just serving a single cohort.

The biggest theme is the need to let go of the past and embrace where the future is going to take us.

SW: What was attractive about Guaranteed Rate’s tech stack?

KA: I really like their hybrid model of build your own, combined with some tech that was taken off the shelf. And what I dig about it is that we’re not in any box. We’re going to take the best of the best and not limit ourselves based on any one particular perspective. At the end of the day, Guaranteed Rate really is a fintech company that happens to also do retail lending, which is a very unusual combination. Usually fintech companies tend to be focused on consumer direct and a pure digital play.

I liked that they were trying to solve the problem across a variety of different channels of customer touch points, which I thought was much more relevant to the way that customers want to interact with their loan officers. So sure, some people just want to do online, and we can do that. But there’s also that need to be able to support Realtor partners, to be able to talk to financial planners, to have more of a consultative sales approach.

And then on top of it, Guaranteed Rate was at the cutting edge of automation. As a product person, I have all these dreams and aspirations for all the cool things I’m putting out. And if your tech partner can’t deliver on that because all they do is vanilla, Fannie and Freddie business, that’s limiting. We’re actually solving across all these different products and programs, which really supports my ability to be creative.

And we’re quick — we don’t have all this red tape. And that speed is like a dream come true. So now I feel like I found some real alignment between the ability to dream things and quickly execute a go-to-market strategy and plan that we’re able to implement in a meaningful way. That’s like nirvana.

SW: What are some of the things you have done this year?

KA: We’ve had an amazing year with getting out our reverse product line and we have launched a proprietary non-QM product, which I think is really amazing. We’ve put out 223 new product programs and features this year so it’s been an awesome year.

And we’ve done a lot with affordability, which has been so important in this market. And I don’t just mean like down payment assistance programs, but affordability options when mortgage rates have impacted everyone.

SW: How do you work with the tech team? And where do the ideas for new products come from?

KA: Victor [Ciardelli, Guaranteed Rate’s CEO] is a visionary when it comes to tech, and one of the great things about working with him is that he is so tech-focused. Where I come in and complement that is that I’ve always been super focused on product and how product interacts with tech in order to drive meaningful results and allow us to serve more customers. So Victor sets the direction and really provides the north star, but there’s room for everyone to contribute to how we bring the best version of that out to market.

I’m a firm believer that product is a team sport so I partner closely with the tech team. It takes a range of different amazing people and different ideation to create great product strategy and programs. My job as an executive is to know a good idea when I hear it. My philosophy for product management is to bring smart people in the room and let them all participate in that and raise up the best idea.

SW: Looking back to when you started in the industry, what are some defining moments as far as technology and what technology could mean for product?

KA: The first was when Fannie Mae and Freddie Mac came out with Day One certainty, which started the conversation about what could automation look like and how could we do more to create a better customer experience. That was a moment where I started dreaming and realizing it’s not just about getting rid of the little plastic things on our fingers to flip through the paper. We’re gonna do cool stuff!

And then, when blockchain HELOCs became a thing, I thought about, where does data lead us in this equation? To me, it’s still one of the most interesting conversations because it’s really a conversation about data and ledgers and what that means for how we bring data into the process. Because technology can have all these great ideas, but if we can’t get into a format that ultimately goes into the secondary markets and people are going to buy, this is where the breakdown occurs. And so thinking about how to be part of that long-term solution that could really benefit customers in the long run is cool.

And then recently, of course, seeing that AI is going to be another defining moment. We haven’t really seen how that one’s going to suss out yet but it’s going to change the way we in our industry provide value to our communities. It’s going to completely change the way over time that we fulfill loans and everything else that we do.

SW: One of the products you launched this year was the Rate App, which is focused not just on financial education but overall wellness. What was the thinking behind that?

KA: We often talk about educating people and communities to drive better outcomes, and when I think through that lens of education and empowerment, I see Victor’s vision for the Rate App, which is about financial wellness but also total personal wellness. It allows us to make and maintain a relationship with a consumer by offering a true value to the community that we’re serving — it’s not just a transactional relationship. It also provides a social good that is beneficial to everyone. It’s got meditation and yoga as well as financial education.  

SW: How are you developing products for the next wave of homebuyers?  

KA: When I think about where the future is going, I see a continued diversification and departure from this homogenous customer base that’s a W-2, single-breadwinner household.  

It is very unusual to find a single-income household any longer. Many people have multiple different jobs and there are lots of multigenerational households, so the definition of what it means to earn income and how we provide value to society is really changing.

SW: How do you stay close to the consumer to make sure that there’s a reason for a particular product and it’s not just a cool idea?

KA: I think it’s important to start out with the vibe, but the next step needs to be looking at some facts and data. After doing some digging I might find it’s not as cool as I thought it was, so I like to have a robust process around product development and idea evaluation. It’s important to have a wide net, looking at data, P&L, a cost benefit analysis, then talking to trusted resources and influencers throughout the business to get a pulse on what they think about an idea.

I have a very informal committee structure where I will shop around an idea, pulling data together and just doing a temperature test. And then sometimes it’s also fun to experiment because there’s not always a clear answer. So we’ll try it and see if we’re going to innovate some gold here.

SW: Looking to 2024, what are you excited about?

KA: I am really excited about 2024 because I have spent the last year building out a new team and a product launching structure that I think is going to dominate. And I feel that I’m at the right place, at the right time and with the right company to pull that off.

For the industry at large, I think we’re going to continue to see consolidation in 2024. I think that we’re going to see companies that have been prudent with their finances and made smart tech investment being the ones that succeed. There’s going to be a lot of companies that reinvent themselves. We need highly adaptable companies with prudent capital who are well invested in tech — I think those are going to be the winners in this whole consolidation piece.

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Did today’s existing home sales report give us a playbook for housing in 2024? I would argue yes, and the housing market today looks a lot like what we saw in late 2022. However, this time around, the Federal Reserve rate hike cycle is over, and we don’t need to worry about Fed presidents going on CNBC in 2024 crying about 6% mortgage rates making their lives difficult. So let’s take a look at the playbook.

From the National Association of Realtors (NAR):Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – elevated 0.8% from October to a seasonally adjusted annual rate of 3.82 million in November. Year-over-year, sales fell 7.3% (down from 4.12 million in November 2022)

Here are some charts from today’s report:

So is this a repeat of last year? Yes, to a degree. In 2022, we recorded the most significant single one-year home sales crash ever. Then sales stopped declining around 4 million — a critical level I have talked about for years. In 2023, we had one big bounce in sales and then sales trended lower all year long as mortgage rates went from 6% to 8%.

Now that mortgage rates have fallen almost 1.5%, we have found an extreme bottom of existing home sales to work from. Purchase application data has had a positive forward-looking trend for six weeks now; this bodes well for the future, especially if this can continue into the spring. 

We created the weekly tracker article to guide people forward because so many people expected a significant price crash in 2023 as certain groups keep on saying prices follow volume. That is partially true, but we weren’t going to get the biggest crash in prices in 2023 to go along with the biggest sales crash in 2022. I give more details in this interview on why I believe the housing market dynamics shifted on Nov. 9, 2022. In late 2022, mortgage rates fell, creating positive, forward-looking data; people didn’t go with it and got caught off guard many months into 2023. So, let’s not make that mistake in 2024.

Let’s go over some of the other critical data lines.

From NAR: First-time buyers were responsible for 31% of sales in November; Individual  investors purchased 18% of homes; All-cash sales accounted for 27% of transactions; Distressed sales represented 1% of sales; Properties typically remained on the market for 25 days.

The days on market have always been a critical data line for me. I never want to see this line at teenager levels — that means we don’t have enough homes to sell or a massive credit sales boom, which will lead to a bust. Sales haven’t been booming the last two years: too many people are chasing too few homes. However, the fact that this is over 19 days is a good thing. I would prefer 30-45 days. This data line is very seasonal and rises during the year’s second half. I hope to see a few months of 30 days on the market before the spring selling season heats up.

NAR: The median existing-home price for all housing types in November was $387,600, an increase of 4.0% from November 2022 ($372,700). All four U.S. regions posted price increases. 

Of course, the median sales price is always seasonal. We have the more robust data early in the year and the weaker part in the second half, but prices stayed pretty firm even with 8% mortgage rates. As I have often discussed with our weekly tracker data, the year-over-year price cut percentage stayed 4% below 2022 levels the entire time mortgage rates accelerated higher. The marketplace data told us we had no stressed sellers in 2023.

NAR: Total housing inventory at the end of November was 1.13 million units, down 1.7% from October but up 0.9% from one year ago (1.12 million). Unsold inventory sits at a 3.5-month supply at current sales pace, down from 3.6 months in Oct. but up from 3.3 months in Nov. 2022. 

For all the people screaming it’s housing 2008: Remember, we had 4 million active listings in 2007, and the annual monthly supply was 10.8 months in 2008. In 2011, the days on the market were 105 days, and we had a massive distress supply, hitting the markets with a job loss recession. Today, total active listings are 1,130,000, the monthly supply is at 3.5 months, and the days on market is 25 days; reading is a good thing.

So, today’s existing home sales report beat estimates and looks about right to me. The growth in purchase application data we have seen in the last six weeks shouldn’t have hit this report fully as it takes 30-90 days before purchase apps hit sales data. So, let us look into 2024 like we looked at the housing market on Nov. 9, 2022. The market dynamics have shifted, and we will go with the forward weekly housing data until it changes negatively.

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The landscape of real estate is undergoing significant transformations in 2024, driven by a confluence of technological advancements, shifting market dynamics and evolving consumer behaviors. 

1. Technology 2024: Proptech challenges and profitability pursuit

The proptech sector, a technological cornerstone of the real estate space heavily reliant on venture capital, has encountered formidable challenges in the past year. The Federal Reserve‘s rate hikes and a general slowdown in venture capital investment have created a challenging environment, leading to layoffs and financial struggles for prominent companies. The housing market’s conditions, characterized by soaring prices and limited availability, have compounded these challenges.

As we enter 2024, proptech companies are likely to place an unprecedented emphasis on monitoring their balance sheets, with a sharp focus on immediate-term profitability. The year will unfold with a strategic shift in business models, emphasizing the expansion of product offerings and investments in consumer education to adeptly navigate the housing market slowdown. Technology is set to emerge as a crucial tool in such sectors as the rental segment, with the advent of online rental screening software, enhancing efficiency, rent payment reporting and thwarting fraudulent activities.

Despite uncertainties, optimism is likely to pervade the industry, with companies leveraging partnerships and eyeing potentially lucrative IPOs in the future. The resilience and innovation demonstrated by the formation of new companies underscore the sector’s potential to thrive in both adversities and favorable conditions.

The technology likely to have the biggest impact in 2024

• Data-driven property management: Real-time insights into property performance optimize rents, maintenance schedules and tenant satisfaction.
• Remote work: Technology enablement creates more flexibility and freedom.
• Cybersecurity in real estate: Increasing investments protect sensitive property and financial data in the digital realm.
• Artificial intelligence (AI) and predictive analytics: Revolutionizing decision-making with data-driven insights, predictive property values and investment opportunities, expediting the process by removing manual tasks.
• Augmented reality (AR) and virtual reality (VR): Transforming property viewing experiences with virtual tours and enhanced property visualization.

2. The emergence of secondary markets will challenge the traditionally popular locales in 2024

In a notable departure from its traditionally local focus, more than ever real estate agents in local markets are needing to think more nationally as opposed to regionally. This shift is propelled by the increased migration of people, as evidenced by a variety of data points. RentSpree user statistics have showcased a significant spread of rental applicants across the nation. Between 2021 and 2023, approximately 17% of rental applicants sought housing in other states, reflecting an upward trend from 14% in 2020 and 12% in 2019. This trend is likely to intensify this coming year.

This nationalization is underpinned by two fundamental factors. First, housing affordability has plummeted to its lowest level in over 30 years. The combination of escalating home prices and rapid increases in borrowing costs has prompted individuals to explore housing options beyond their current locations. Secondly, remote and hybrid work options, increasingly prevalent since the pandemic, are becoming a permanent fixture of the professional landscape. 

As we prepare for 2024, the challenges of affordability and the evolving nature of work will foster increased migration to secondary markets nationwide. This shift not only holds promise for relative affordability but also aligns with lifestyle preferences. The more nationalized approach to real estate will impact organizations supporting industry professionals and the individuals actively servicing the sector.

3. Multiple listing services need to become the source of truth for rentals

Multiple listing services (MLSs), traditionally recognized as the source of truth in the for-sale segment, will more so than ever face the imperative to extend this role to the rental market in 2024. The current absence of rental listings on most MLSs has significant repercussions, resulting in financial losses for both agents and tenants. More than 60% of rental properties are absent from MLSs, curtailing exposure and profitability for agents and landlords alike.

Advocating for standardized data for rental listings, diverse compensation models for agents and the provision of reliable and timely information for renters will be key, especially this coming year. Rentals will continue to play an increasingly important role in the real estate market and people’s lives given the severe affordability issues permeating the for-sale sector. The inclusion of rentals in MLSs stands to streamline the rental process, minimize delays and instill efficiency. The benefits extend to increased agent commissions, strengthened sales pipelines and a reduction in fraudulent activities.

Bright MLS, one of the largest MLSs nationwide, is leading the way and has integrated rental listings with commendable success. This proactive move serves as a testament to the positive outcomes achievable through aligning MLSs with the evolving dynamics of the real estate landscape.

4. Flourishing during challenging times: A tale of two (interconnected) markets

The prospects of homeownership in 2024 remain elusive for many. With rates hovering between 7% and 8% and single-family home prices still at record highs, the financial barriers to purchasing a house are and will continue to be formidable. The cost differential between buying and renting, with the former averaging 52% higher, underscores the financial challenges associated with homeownership.

In contrast, the rental market is emerging as a pivotal player, presenting increased choices and decreased competition for renters. Construction of new units, as highlighted by a recent Zumper National Rent Report, contributes to a market dynamic where prices will continue to decrease in numerous regions. As a result, the focus in 2024 further pivots towards the rental market, offering a lifeline to those seeking shelter as well as those servicing the housing market.

This paradigm shift in the real estate landscape presents a unique opportunity for real estate professionals. With the for-sale market navigating a precarious juncture marked by compensation lawsuits and affordability concerns, the emphasis in 2024 will be on generating leads and income through other avenues, such as the rental market. Rentals, therefore, will not just help to bridge the gap for agents during challenging times but also serve as an investment into the future for both new and seasoned real estate professionals.

5. Building a fairer financial future toward homeownership

With affordability as the primary concern heading into 2024, tools intended to support greater financial empowerment will continue to gain prominence this coming year. Rent payment reporting is one of the initiatives that will play a more prominent role in fostering a fairer financial future for all participants in the real estate ecosystem. 

Major players in the mortgage industry, such as Fannie Mae and Freddie Mac, have initiated programs to incorporate rent payments into credit histories. Fannie Mae’s pilot program, extended until December 2024, signifies a commitment to exploring the far-reaching implications of including rent payment history in credit reporting.

This inclusion carries profound empowering potential, influencing loan approvals and addressing racial disparities prevalent in the housing market. As we chart the trajectory towards a more equitable financial future, additional private sector solutions are likely to emerge in 2024 and become instrumental in facilitating this transformative change. 

In summary, the real estate landscape of 2024 is marked by a dynamic interaction of technological advancements, market dynamics and socioeconomic influences. The various trends mentioned above collectively shape a narrative of an industry undergoing constant change. Success in 2024 will hinge on the capacity to embrace change and capitalize on emerging opportunities.

Michael Lucarelli is the CEO and co-founder of RentSpree. 

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