A Phil Hall Op-Ed: Over the past couple of weeks, there have been a number of forecasts about where the U.S. economy in general – and the housing market, in particular – will be heading in 2024.
There are a few easy predictions that I can make. For starters, I can guarantee there will be no end to the federal conservatorship for the government-sponsored enterprises. This year marked the 15th anniversary of the seizure of Fannie Mae and Freddie Mac, and when the 16th anniversary rolls around things will be just as they are now.
I can also predict that there will be no change on how the overwhelming majority of American real estate professionals earn their commissions. Yes, I know that one of the big stories this year involved a lawsuit that insisted the commission structure contributed to an antitrust environment – similar lawsuits are slated for 2024. In my humble opinion, this matter will slowly wind its ways through the courts and will ultimately need to be decided by the U.S. Supreme Court, most likely in the favor of the real estate industry. But that won’t happen for at least several years, and until then I think brokerages will not panic and will keep doing what they’ve been doing.
Furthermore, I predict that the National Association of Realtors will still be a vibrant and crucial force in this industry. To borrow a line from the late Queen Elizabeth II, this was the annus horribilis for NAR. Mercifully, there is no such thing as a permanent crisis and I suspect NAR’s leadership will come back in 2024 with a better legal strategy to fight those trying to damage the industry and a more forceful communications message for its members and the wider economy.
And speaking of the economy, I can’t say whether or not the U.S. will be in a recession. But considering how the cost of almost everything keeps getting higher, a recession would be an anti-climax. I suspect mortgage rates will be stuck in the 6% to 7% range for the coming year and home prices will stay up around their historic highs. What we’ve been living through in 2023’s economy will be the new normal in 2024, barring any crazy disruptions from overseas or at home.
As for the Federal Reserve, I hope that Jerome Powell and his colleagues have The Supremes’ “Stop in the Name of Love” on their playlist in 2024. Despite the insistence by many that rate cuts are coming in 2024, we should remember that New York Fed President John Williams insisted a pivot was not on the central bank’s agenda. Plus, the Fed is nowhere near its desired 2% inflation rate. Still, no rate hike news is always very good news and I predict the Fed will keep its finger on the pause for most of 2024 – any cuts will probably occur in September or October, when they could benefit a Biden re-election campaign.
And as for predicting the next election – not today, sorry. After all, it is the holiday season, so why spoil it with politics?
