Key takeaways

  • Low levels of inventory mean that sellers continue to have the upper hand in the housing market.
  • Mortgage rates have come down from their peak but are still high, and steep home prices are dissuading would-be buyers.
  • If rates were to drop further, that would spur the market for both buyers and sellers.

With home prices historically high, inventory still tight and big commission changes coming in the second half of the year, many prospective sellers and hopeful buyers are feeling nervous about today’s housing market.

The median sale price for an existing home in the U.S. hit a record-high $419,300 in May 2024, according to the National Association of Realtors (NAR). And after rising above 8 percent in October 2023, the average 30-year mortgage rate as of early July 2024 was 7.09 percent — a welcome decrease but still much higher than most homeowners’ locked-in rates.

Home prices, mortgage rates, inventory levels and commission structures will all shape housing affordability throughout the remaining months of this year. Curious where these trends may go? Read on to learn what the experts predict for the rest of the 2024 housing market.

What will happen to the housing market in the second half of 2024?

Rates roughly doubled back in 2022, thanks in part to the Federal Reserve’s war on inflation, and they have stayed high since. While the Fed does not directly set mortgage rates, mortgage lenders take cues from them, and mortgage rates climbed in tandem with the Fed’s long string of rate hikes.

Mortgage rates have defied expectations and spent the first half of 2024 above 7 percent, further denting affordability for would-be homebuyers. — Greg McBride, Bankrate Chief Financial Analyst

The Fed has held rates steady so far in 2024, and has signaled that rate cuts, rather than hikes, could be coming before the year is out. But many predict that homebuyers will still be feeling the squeeze throughout the year.

“With inflation remaining stubbornly high, the timetable for Fed interest rate cuts has repeatedly been pushed back,” says Greg McBride, CFA, chief financial analyst for Bankrate. “Mortgage rates have defied expectations and spent the first half of 2024 above 7 percent, further denting affordability for would-be homebuyers. They should eventually trend lower as inflation pressures ease further and we get closer to a Fed interest rate cut. A sharp economic slowdown, though not widely expected, would bring mortgage rates materially lower — but be careful what you wish for.”

Key housing market stats
  • The median home-sale price as of May 2024 was $419,300, up 5.8 percent from one year ago and the highest median NAR has ever recorded.
  • The nation had a 3.7-month supply of housing inventory as of May, per NAR, which is low enough to be considered a seller’s market.
  • Home-price growth increased in April 2024 by 6.3 percent, according to S&P CoreLogic’s latest Case-Shiller Index. That’s down from 8.3 percent the previous month.
  • Bankrate’s latest national survey of large lenders shows the average rate on a 30-year mortgage was 7.09 percent as of July 3, 2024.
  • The U.S. inflation rate as of May 2024 was 3.3 percent — still higher than the Fed’s stated goal of 2 percent.

Looming commission changes

One thing to keep an eye on: Thanks to the settlement of a major federal lawsuit, the way real estate commissions work in the U.S. is set to change in August. The longstanding structure has been for home sellers to pay both their own agent’s commission and their buyer’s, often with that cost “baked into” the home’s asking price. But going forward, buyers may have to cover their own agent’s commission fee.

How this might affect home prices and affordability remains to be seen. “The new rules mean buyers will have a say in how much they pay buy-side agents. Aside from that, it’s hard to know exactly how the changes will affect the housing market or the purchase process,” says Bankrate prinicipal writer Jeff Ostrowski. “Will commissions fall? Will buyers decide to do it themselves, without using buyers’ agents? It could be years before we know the answers.”

Will housing sales decline?

While home prices rose or held firm in 2023, the volume of home sales softened considerably. That has continued so far in 2024: Existing-home sales in May were down both month-over-month and year-over-year. However, these trends may pivot if mortgage rates continue to dip.

“Housing demand has been steady but slightly below one year ago due to historically low housing affordability conditions,” says NAR chief economist Lawrence Yun.

“Housing sales are expected to increase a bit,” says Chen Zhao, who leads the economics team at Redfin. “We are not expecting sales to increase dramatically [though], as rates are likely to remain above 6 percent.” However, Chen thinks prospective homebuyers may get something of a reprieve in the months ahead in the form of “a couple of rate cuts from the Fed in the fall — September and December.”

“Lower mortgage rates would help spur home sales activity, which is expected to increase in 2024 compared to 2023,” says Selma Hepp, chief economist at CoreLogic. “Declines in mortgage rates will drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions.”

Will housing inventory increase?

Speaking of much-needed inventory, housing supply remains very low. The overall number of existing homes on the market for sale as of May sat at 1.28 million units, up a solid 18.5 percent from the previous year. Even so, that represents only a 3.7-month supply, far short of the 5 to 6 months usually needed for a balanced market.

More supply is beginning to appear, and this could be an early indicator of more home sales later. — Lawrence Yun, Chief Economist, National Association of Realtors

“More supply is beginning to appear, and this could be an early indicator of more home sales later as consumers see more choices and home prices no longer perk up,” Yun says.

For inventory levels to improve significantly, there would need to be either a surge of homeowners listing their existing properties or a huge amount of new-construction homes hitting the market. While both seem relatively unlikely, Yun does foresee some increase in housing inventory for 2024: “Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location,” he said in a recent NAR Pending Home Sales analysis. “Many sellers who delayed listing in the past two years will start putting their homes on the market to move to a different home that better fits their new life circumstances — such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids.”

Will home prices go down?

Housing prices have been on fire lately, culminating in historic highs — May’s median of $419,300 is the highest price ever recorded by NAR. So will home prices drop in 2024? Probably not: “Mortgage delinquency rates are at historic lows, and therefore, there are very few distressed property sales,” Yun said. “This will keep home prices steady, and they definitely will not decline in any meaningful way.” In fact, NAR predicts that median home prices will increase 1.8 percent over the course of 2024.

Zhao also noted that prices are intricately connected with housing inventory. “Sellers are likely to remain reluctant to give up their low interest rate for a much higher one, so inventory will remain constrained,” she says. “As more time passes, more homeowners may be ‘forced’ to sell due to life events, so inventory may rise from the current anemic levels, but it’s unlikely to increase much. That means that prices are unlikely to fall on a year-over-year basis, unless demand falters.”

Will 2024 be a buyer’s or seller’s market?

While inventory has been inching up, overall it is still tight enough that the seller’s market seems unlikely to change this year. “The current significant shortage of inventory suggests it would be hard to [become] a buyer’s market anytime soon,” says Hepp.

“Given expectations about interest rates and supply, demand will probably [continue to] exceed supply,” Zhao says. “Supply is likely to remain below what we would deem a balanced market.”

It remains a competitive and frustrating process for first-time homebuyers in particular. — Greg McBride, Bankrate Chief Financial Analyst

“The plague of low inventory won’t be cured in the short-term, and it remains a competitive and frustrating process for first-time homebuyers in particular,” says McBride. “Buyers should be wary of biting off more than can be financially chewed. Home prices are at record highs, and insurance costs are up substantially in many markets. You’re not getting a bargain, and the willingness to walk away might prove to be a good choice.”

Bottom line on the 2024 housing market

The continued combination of high mortgage rates, steep home prices and low inventory levels appear poised to ensure that the remainder of 2024 is a challenging market for both buyers and sellers. But rates have cooled a bit — if that continues through the rest of the year, as some experts predict, then market activity should heat up in response.

The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of an experienced local real estate agent. If you want to enter the market during the remaining months of 2024, whether as a buyer or a seller, let a pro lead the way for you.


  • Maybe, but probably not significantly. Experts predict that higher rates will likely persist throughout the rest of 2024 — though hopefully, after reaching 8 percent in October 2023, the worst is behind us. “I believe we’ve already reached the peak in terms of interest rates,” NAR chief economist Lawrence Yun said at the company’s NXT conference in late 2023. He told the audience he expects rates to range between 6 and 7 percent by spring buying season. However, as of early July, Bankrate data showed the 30-year mortgage rate was averaging above that predicted range at 7.09 percent.
  • No — experts do not think a housing market crash is looming. Lending standards are much more strict now than they were before the Great Recession, and with low inventory and high demand both continuing, the housing market is not likely to enter a recession in the coming year.
  • Many prospective homebuyers chose to wait things out in 2023, in the hopes that 2024 would bring a more advantageous market. But so far, with mortgage interest rates still relatively high and housing inventory stubbornly low, it looks like 2024 will remain a challenging time to buy a house. If rates continue to go down, though, that would alter the landscape — not only would it make the purchase more affordable for buyers, but homeowners locked into their previous lower rates might finally choose to sell, which would add much-needed inventory to the market.