Will SC homebuyers catch a break in 2024 after a year of skyrocketing prices? What experts predict

Soaring prices and declining sales have mostly been the norm for the South Carolina housing market this year.

Will 2024 be any different?

There are signs that overall, the South Carolina housing market will line up with nationwide trends of easing home prices and sales slumps, some experts predict. However, such outcomes will vary among markets in the state.

The housing industry has been on the front lines in the fight against inflation the last two years because it was immediately impacted when interest rates first began to rise in 2022.

“Rising interest rates increase the cost of buying a home and as such, lower affordability and total demand,” said Joey Von Nessen, research economist at Moore School of Business at the University of South Carolina.

Looking ahead to 2024, U.S. housing markets may see a mix of continuity and change against a backdrop of modest economic growth, slightly higher employment and easing inflation of longer term interest rates, realtor.com states.

Meanwhile, redfin.com also writes that there are signs of a shift toward a buyer’s market in 2024, again noting the end of pandemic-driven inflation and mortgage rates dropping.

SC Housing Market 2024

Von Nessen said that the South Carolina housing market has begun to stabilize — total home sales decreased by 23% statewide in 2022, but by just 6% in 2023.

“This suggests that the housing market’s readjustment period may be coming to an end,” Von Nessen said.

Also, the Federal Reserve has signaled it is unlikely to raise interest rates in 2024, which will help limit more reductions in housing affordability, he added.

“If the Federal Reserve does not further increase interest rates in 2024, we expect that the growth rate in housing sales could fully stabilize next year,” he said. “This means that we would likely see either relatively flat or perhaps small, positive growth rates.”

Von Nessen notes that rising interest rates over the past two years have also contributed to the problem of low inventory in the state. Rising mortgage interest rates have made existing homeowners less likely to want to move.

“A current homeowner with a 3% mortgage interest rate, for example, is not as likely to want to move if he or she has to take on a 6 or 7% mortgage interest rate in order to do so,” Von Nessen said.

The Charleston Regional Multiple Listing Service is more bullish about the housing market in 2024, at least where the Holy City is concerned. In a report published on Monday, CHS MLS expects the Charleston housing market to see continued growth next year.

“One factor driving the Charleston market is sustained job growth, ensuring ongoing housing demand,” CHS MLS states. “The principle of supply and demand helps explain the rising home prices in Charleston, where limited supply meets high demand.

SC metro markets

Below are 2024 housing predictions for a few large South Carolina metro markets by Realtor.com.

U.S. Housing Market 2024

Predictions about South Carolina’s housing market in 2024 are mostly in line with those made for the U.S. as a whole.

Realtor.com predicts a return to pricing in line with financing costs in 2024, spurred by home prices, mortgage rates and income growth.

“Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year,” Realtor.com states.

The real estate site also forecasts that similar forces will keep total home sales relatively unchanged.

“Although mortgage rates are expected to ease throughout the course of the year, the continuation of high costs will mean that existing homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place,” Realtor.com states.

Redfin predicts home prices will fall 1% in the second and third quarters of 2024, when the home-selling season is in full swing.

“Home prices will still be out of reach for many Americans, but any break in the affordability crisis is a welcome development nonetheless,” Redfin states.

Unlike Realtor.com, Redfin says it believes sales will increase overall across the U.S. and will end 2024 up 5% year-over-year. Sales will improve in part because of a steady decline in mortgage rates. Also, more people will start trying to sell homes as they begin to realize prices have begun to fall, Redfin predicts.

“Home sales will speed up throughout 2024 as affordability improves and more homes hit the market,” Redfin states.