Understanding the housing market in 2024 is critical to making a real estate investment game plan. To make your move—and a profit—you need to know how inflation, housing shortages, and other factors will impact your bottom line.
So, we’ve broken down U.S. News and World Report’s official report of housing predictions for 2025 (and beyond) in easy-to-understand terms. This way, you can grasp exactly how broader market issues are connected to you. Let’s get right into it.
Main Takeaways
- The housing market in 2024 and beyond has a few main trends: first and foremost, outrageously expensive housing market prices are still pushing more people toward rentals.
- Also here to stay are work-from-home policies, industry intersections with politics, AI, and other factors.
- Meanwhile, population growth, home quality issues, and insurance-regulated home construction practices may grow in the coming years.
Renting Will Stay Cheaper Than Owning a Home
When people consider the costs of home ownership, they will have to factor in more variables than they possibly used to. As property management services in Northern Virginia, we believe this will discourage them from pursuing home ownership and attract them to rentals.
Traditionally, many people would simply look at the home sticker price and mortgage interest rates. However, the housing market in 2024 has changed that. Nowadays, there’s so much more to think about—higher insurance premiums, HOA fees, climate change, and other issues will dominate the conversation.
Bankrate published an eye-opening study that, for single-family homes, the costs of these variables have risen by almost 26% in the past four years. All the meanwhile, mortgage rates for these homes have more than doubled to $2,278 a month. After considering these points, as well as monthly maintenance costs, monthly home ownership costs totaled $3,800—an overall 64% raise in the past four years.
Rentals, Compared to Buying
However, for rentals, costs have risen much more modestly. Renting a single-family home rose to $2,236, up 16.6% since 2020. To boot, renters’ maintenance costs are nearly four times less than those of homeowners. With the housing market in 2024, renting a single-family home costs 70% less than owning one.
Inflation Will Keep Discouraging Home Buying
According to the U.S. News and World Report’s findings, home sales will keep plummeting as long as inflation raises housing market prices and mortgages.
Inflation rates are slated to gradually drop over the next two years. However, the Federal Reserve reported that inflation will only fully drop to a manageable 2% come 2026. And at the end of the day, mortgage rates must drop under 6% for buyers to maintain serious interest.
If housing market predictions for 2025 are to be believed, this is the time for investors and landlords to strike. It’s a golden era with plenty of opportunity. After all, this short time window may be the peak of people rejecting owned housing market prices in this decade.
As such, you should take advantage of this period to maximize your rental income. You may want to put in extra work to aggressively market your units right now, both through traditional marketing and AI-powered marketing. It could pay off more than usual.
The National Housing Shortage is Here to Stay Until 2030
To really top the above housing predictions for 2025 off, here’s another encouraging one:
The housing market in 2024 may seem like a short-lived housing supply shortage bubble, but the evidence shows it’s not. A National Association of Home Builders report noted that the housing shortage 
will gradually, slowly, be addressed through 2030. Because of this, rentals are expected to stay in steady demand throughout the decade.
Newly Built Homes May Face Quality Control Issues
The U.S. News stated that 30% of the current housing inventory is made up of freshly built homes. This sounds great, but it comes with a catch—some feel construction quality control has fallen because the housing market in 2024 has faced a national homebuilder labor shortage.
As such, investors would benefit from having a third-party property inspection before leasing it out to renters. This is especially true when they work with a small builder or have unconventional or custom homes.
US Population Rates Will Go Back to Normal
The U.S. Census Bureau made housing market predictions for 2025 that population trends will keep stabilizing to their pre-pandemic state. In fact, they could increase. Many states had more population growth in 2023 than they had since early 2000.
As such, there likely will be a surge in families in need of housing as the decade continues.
Political Instability Could Impact Renter Decisions
If politics, both national and global, become more tumultuous, everyday consumers will be impacted by that instability. As a result, they may hesitate to make huge investments out of fear those choices could be uprooted or disrupted. This could affect housing market prices and demand.
For instance, let’s say a region begins to face climate change effects like flooding or unbearable heat waves. If the political sphere inadequately addresses these housing threats, people may steer clear of moving into that area. Also, current residents may move out in droves.
In general, each area has unique political issues that impact your potential tenants. It’s imperative to read 
between the lines and understand how policy and leadership changes will affect their residential choices, good and bad.
Hybrid Work Schedules Are Likely Here to Stay
As you may have noticed, hybrid work is on the rise, with many workers vying for total remote work. As such, trends are pointing towards increased home-based work schedules in peoples’ futures.
In the housing market in 2024, this makes it more critical than ever to design housing that is attractive to remote workers. For example, if you own an apartment complex, you may want to set up common quiet areas for workers to use.
AI and Property Insurance Companies Will Affect Home Construction Processes
AI has the potential to transform how homebuilding production occurs. For instance, AI software could iron out structural issues, or 3D printing could assist with planning. It may be used to streamline the construction process and overall hasten production timelines.
In addition, property insurance companies may have more of a say in the home-building process because they will be impacted by increased weather-related threats. So, if you’re investing in new construction projects, this is something to keep in mind.
Prepare for Changes in the Housing Market in 2024
The housing market in 2024 and beyond has a few main trends: first and foremost, rental demand isn’t going anywhere. Neither are work-from-home policies, industry intersections with politics, AI, or other factors currently shaping housing market predictions for 2025. Meanwhile, population growth, home quality issues, and insurance-regulated home construction practices may grow in the coming years.
Luckily, Bay Property Management Group is here to help. Whether you own one property or 100, our team of expert property managers can help with every aspect of the rental process. From tenant screening to rent collection, maintenance, and inspections, we’ve got it covered. Contact PPM today to learn more about our property management services throughout Northern Virginia.
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