With the end of the year only days away, many home buyers across Oregon are now looking ahead to 2024. And many of them are probably wondering the same thing:
“Will 2024 be a good time to buy a home in Oregon?”
As a mortgage company that serves the entire Pacific Northwest, we do our best to educate home buyers on current real estate market conditions across the region. Today, we set our sights on Oregon.
With lower mortgage rates and more homes coming onto the market, 2024 could be a good year to buy a home in Oregon. House prices have also eased a bit, which could increase affordability and inventory and reduce urgency among buyers.
Overall, Oregon home buyers can expect a slightly more favorable real estate market next year. Let’s take a closer look at a few good reasons for buying a home in Oregon in 2024.
Why 2024 Could Be a Good Time to Buy in Oregon
The housing market has undergone wild swings and extreme conditions over the past three years. But now, as we approach the end of the year, things have settled into a new kind of normal.
While home buyers in Oregon could still encounter some challenges in 2024, it will likely be a better year for home buying in Oregon. Housing costs have actually come down in most cities across the state due to declining mortgage rates and home prices.
Here are three data-based reasons why 2024 could be a good year to buy a home in Oregon.
1. More homes are coming onto the market.
Over the past six months or so, more and more homes have come onto the real estate market in Oregon. The “months of supply” and total active listings metrics indicate that buyers could have more homes to choose from in 2024.
At the end of 2023, the state of Oregon was approaching a 3.5-month supply of homes for sale. That was higher than the national average for that period and a good sign for those planning to buy a home in Oregon during 2024.
Generally speaking, a 5- to 6-month supply of homes is considered a balanced market, so Oregon is still seeing a rather tight market regarding available housing. That said, a 3.5-month supply is higher than many other surrounding markets, giving buyers more homes to choose from.
However, housing market inventory remains fairly tight in Oregon and elsewhere across the nation. So, while the supply needle is starting to move in favor of buyers for a change, some patience and persistence will be required when house hunting in 2024.
The good news is that we could see more inventory in Oregon simply because more homeowners may be encouraged to sell their homes. Many homeowners have hesitated to sell out of fear of trading in their current low contract rates in exchange for much higher rates with a new mortgage and home purchase.
But as rates continue to plateau and dip next year, more would-be sellers may finally take the plunge and put their homes on the market, opening up more housing inventory for buyers looking for a new home.
2. Mortgage rates are expected to be lower next year.
Speaking of mortgage rates, we could see a dip in rates in the new year.
Thirty-year mortgage rates peaked at an average of 7.79% in October of this year. But they have been trending downward ever since. This is another reason 2024 could be a better time to buy a home in Oregon.
Over the past year, sky-high interest rates have made homebuying much less affordable. Mortgages are simply too expensive for many buyers to handle, so they’ve hesitated to enter the market and commit themselves to high mortgage payments. But this trend may be changing direction.
According to Freddie Mac, when this article was published in late 2023, the average rate for a 30-year fixed mortgage loan was down to 6.7%. And mortgage rates might have even further to fall in 2024, since the Federal Reserve has ended their inflation-fighting interest rate hikes.
When they announced the results of their latest nationwide rate survey on December 21, researchers from Freddie Mac wrote:
“Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects.”
As we move into 2024, lower mortgage rates should help to increase housing market affordability in cities across the state of Oregon. Affordability declined during 2022 due to surging interest rates and rising home values. But we’ve seen some incremental improvements since then, and that trend could continue over the coming months.
The National Association of Realtors recently predicted that 30-year fixed-rate mortgage rates would average 6.3% in 2024. And rates dip somewhere into the 5% range the following year. According to the group’s chief economist, Lawrence Yun, this trend could improve housing affordability and entice more home buyers to return to the market.
3. Home prices have eased since hitting a peak last year.
According to the latest data from Zillow, the statewide median home value in Oregon declined slightly during 2023. At the time of this writing, the average home price in Oregon is $483,939. That’s 0.3% lower than the same time last year.
Home buyers could have a little more purchasing power in 2024. The lower mortgage rates mentioned above are just icing on the cake.
Oregon home buyers have had to contend with fast-rising house prices and stiff competition for the past three years. But that’s not the case anymore. As we head into 2024, home values across the state are holding steady.
Home prices in the Portland-Vancouver metropolitan area, in particular, could come down even further over the next year or so. The average home price in the area is $531,528, which is down 0.4% year-over-year. In their “2024 Housing Forecast,” published at the end of November, analysts from Realtor.com predicted that both home sales and prices in the Portland area would decline during 2024.
If that prediction pans out, Portland-area house hunters could encounter lower prices and a more relaxed pace when buying a house in 2024. Other housing markets across the state of Oregon could become more buyer-friendly next year as well.
No one can predict future real estate or mortgage trends with complete accuracy. But a wide variety of indicators suggest that 2024 could be a good time to buy a home in Oregon!