There is a collective sense of investor anxiety in the US as many fear that a recession is looming. Some experts fear that it may already be here as inflation and interest rates have increased and slowed down consumer spending. News outlets like CNBC are calling this pre-recession period a “rich cession.” Real estate investors are jittery because of this uncertainty because high-interest rates and inflation could have devastating effects on the housing market.
CWS Investments has compiled a list of investor questions in the real estate market and has provided up-to-date facts in response to these questions. But before we get to these questions, are you an investor thinking of earning a steady income or gradually building wealth without having the investment anxiety mentioned above? Consider investing in a mortgage note fund.
About CWS Investments Mortgage Note Fund
A mortgage note fund pools together money from investors to buy distressed mortgage notes for purposes of investment. This is an alternative real estate investment strategy that allows you to put money into real estate without direct ownership of property.
The fund is used to purchase distressed mortgage notes at discounted prices from the secondary market. Fund managers then restructure payments for borrowers to enable them to continue with their commitment. Profit primarily comes from the restructured payments from borrowers and are distributed to the investors. For more information about investing in a mortgage note fund, contact a CWS investment consultant.
Because mortgage notes are secured by actual property and the profitability of the fund is based on the ability to refinance mortgage installments, investor capital is typically shielded by market fluctuations. CWS’ mortgage note fund provides investors with an aimed 8 – 10% annualized return. These returns are distributed monthly as dividends. Learn more about investing in a mortgage note fund from CWS founder Chris Seveney today. Now, let’s look at some popular questions about the housing market.
1. What is the housing market prediction in 2024?
The real estate housing market in 2024 is facing increased interest rates, considerably higher demand for housing versus the supply, and increased mortgage rates. High inflation rates also mean that investment property is just that much further away from the reach of new investors.
According to Yahoo Finance, Goldman Sachs predicts that home prices will rise again in 2024. It estimates that, on average, home prices will increase by 1.3% in 2024. This is a revised percentage from the previous 1.7% they estimated in July 2023. They peg this slight increase in home prices to a tight supply of affordable homes in the country.
Zillow Home Price Expectation (ZHPE) survey estimates that at the beginning of 2023 average home prices are expected to increase by 3.5% per year to 2027. The survey also forecasts that:
- Prices will decrease marginally by 1.6% in December 2023 before they pick back up again in 2024.
- Sales for new homes are expected to slow down.
- New and existing single-family home sales are expected to decrease by the end of 2023.
2. When will the housing market be a buyer’s market?
Because of the tight supply of houses, it’s difficult to foresee the US housing market transitioning to a buyer’s market. Here are a few reasons why:
- There is generally a low inventory of homes for sale in the US.
- High inflation is robbing homebuyers of their purchasing power.
- Property investors have been experiencing higher-than-expected costs of building materials. This translates to higher home prices.
A limited inventory, high mortgage rates, and historically high average home prices are making new homebuyers and sellers understandably nervous moving into 2024. However, large housing markets like New York, Las Vegas, and Miami can experience price drops because of government policies and other localized events.
3. What is the real estate forecast for the next five years?
The real estate market is expected to experience fluctuations in the next five years. Zillow estimates a cooling of home prices towards the end of 2023. Factors like demographic shifts, urban development, and changes in work-from-home policies are expected to considerably influence the market.
Despite the recent fears of a housing market crash, experts are still optimistic that residential real estate will continue to gradually grow through 2028. This growth is expected to coincide with the annual growth rate of the real estate market which is projected to grow to $142.90 trillion in 2028.
Over the next five years, While current trends show a cooling from record highs, Experts advise prospective buyers and sellers to stay informed and seek expert advice for specific regional insights. Currently, residential real estate has an estimated market value of $88.91 trillion which makes up about 78% of the US real estate market.
4. Will the housing market crash in 2024?
Predicting a housing market crash is complicated. Recently there have been concerns about a looming housing market crash. However, according to Yahoo Finance, experts are confident that there will be no housing market crash in 2024 – at least not one that is as severe as the one in 2008. Speak with a financial advisor prior to investing to better understand the current economic climate. The information provided by CWS Investments is not indicative or provided by an industry professional.
5. What will house prices be in 2024?
Real estate experts are predicting that home prices are expected to increase in 2024.* As we mentioned, Zillow expects a 3.5% increase while experts at Goldman Sachs predict a modest increase of about 1.3%. Currently, the median price of a standard family home in the US is just over $348,000. By simple estimates, this value may increase the median price to between $353,000 and $360,000. Of course, these prices are general estimates. Actual prices will vary depending on the market. The increment percentages by Zillow and Goldman Sachs will also vary depending on location, and local housing demand.
*CWS Investments is not in the business of providing real estate expertise or advice based on current economic situations.
6. How is the US housing market right now?
Generally, high mortgage rates and elevated home prices are impacting home affordability, leading to a cooldown in some regions. However, demand remains strong in areas like South Carolina and other growing metro areas. According to Zillow, the $348,000 median price for a single-family home is up to 1.1% from the previous year.
7. Is real estate booming in the USA?
While the term ‘booming’ might not fully describe the current state, certain sectors of the real estate market, such as suburban housing and new developments in high-demand areas, are still performing well. However, the overall pace has slowed compared to the unprecedented surge seen during the early pandemic years.
8. Why did US house prices fall in 2023?
US house prices fell in 2023 primarily due to rising mortgage rates, which put upward pressure on home affordability and cooled demand. The Federal Reserve Bank’s actions to combat inflation played a significant role, as higher interest rates impacted the ability of potential buyers, especially first-time buyers, to afford homes.
9. What is the price of a house in the United States?
The median sale price for a standard home in the US is $348,000. This is according to Zillow. Redfin estimates a slightly higher figure of $411,000. However, both publications agree that there has been an increase in home prices between 2022 and 2023.
10. What is the most successful type of real estate in the US today?
Currently, single-family homes, especially in suburban areas and emerging markets, are highly successful in the real estate sector. These properties often appeal to a broader range of homebuyers, including families and remote workers looking for more space. Additionally, markets with affordable housing options are particularly attractive to first-time homebuyers and those seeking better home affordability.
Invest in CWS’ Mortgage Note Fund
Would you like to build wealth without the anxiety of worrying about the stock market? CWS Investments allows investors to put capital in a high-yielding fund that aims to distribute monthly returns, as dividends, at an 8 – 10% annualized rate.
We apply a 360-degree assessment and verification process of the property, the borrower, and the note itself before being included in our portfolio. This gives us the confidence to provide aimed annualized rates to our investors. You can still invest and build wealth in the real estate market without worrying about the possibility of a market crash. Speak with a CWS Investments team member today!
