Durham real estate agent Ashley Applewhite is optimistic about the future of the housing market later this year. (Photo by Emma Hall.)
Monday, April 22, 2024
By Emma Hall
Ashley Applewhite, a real estate agent with the Jim Allen Group, said a projected decrease in interest rates by the end of 2024 should be good for the Durham housing market.
“I think 2024 is really the best time right now for a lot of homebuyers to buy a home,” she said. “And I think we’ll see a lot of home sellers start to become OK with putting their home back on the market.”
With interest rates projected to come down later this year and home sellers gaining confidence in the market, she said it is likely to become competitive and active again.
“I definitely feel that there is a lot of positivity in the market around a decrease in interest rates, and I think that’s going to lead to a demand for housing,” she said.
Applewhite said there should also be more resale inventory in Durham in 2024 as home sellers become comfortable with putting their house on the market.
Joe Matthews, the managing broker of Real Triangle Properties, shares Applewhite’s housing market confidence.
“I am also very optimistic,” Matthews said. “The overall market, I think, is better than last year, from a buyer standpoint and also from a realtor standpoint.”
He said possible lower interest rates are also good for current homeowners, who may not be looking to buy or sell but reduce their mortgage payments.
“If the rate overall goes down, [homeowners] can refinance and get the lower rate,” he said.
Real estate agents are not the only ones looking forward to market improvements later this year. N.C. State emeritus economics professor Michael Walden also expects a positive change in the Durham market in 2024.
“We will likely see interest rates at the end of the year, including mortgage rates, significantly lower or noticeably lower than they are now, which should be good for the housing market,” Walden said.
For context, the federal funds rate, which effects mortgage rates indirectly, was at .33% in April 2022. Two years later, it’s now at 5.33%.
This hike in interest rates is due to a 2022 spike in inflation, which reached a 40-year high of 9.1% in June 2022. The Federal Reserve increased interest rates in order to bring down inflation nationally.
Though a rise in interest rates slows inflation, it also stalls the housing market by making home buying more expensive.
“When interest rates kind of skyrocketed from what we saw a couple of years ago, I think a lot of homebuyers, it kind of put them at a standstill with making any decisions about buying their first home,” Applewhite said.
She said the hike in interest rates made home buying unaffordable for many in the Triangle and it affected potential home sellers.
“We also had a lot of home sellers that didn’t want to move because they locked into a good interest rate, and so they wanted to kind of sit and hold on that rate,” she said.
Though interest rates are projected to come down this year, other challenges are still present in the housing market.
One challenge Walden expects the Triangle to face in 2024 is an influx of people coming to live in the area.
“We are such a magnet for new people to move in,” he said.
That increased competition from people moving to the area and more people already in the area looking to buy again will put pressure on housing prices, which he expects to go up.
“When mortgage rates go down, the price of housing tends to go up faster,” he said.
