The sun is shining, the birds are singing, and the housing market is … a bit of a mystery.

As we approach the traditionally busy summer season, the big question on everyone’s mind is: will it be another bout of bidding wars, or will buyers finally see some relief? Here is a breakdown of some of the most common expert predictions.

Lower mortgage rates

Mortgage rates have continued to drop slightly, helping to make homeownership more affordable for some potential buyers. Real estate specialists predict that the rate for 30-year mortgages will fall between 6.4 and 6.5 percent this year, which would be much lower than the peak 2023 rate of 7.31 percent last October. While such a decrease won’t bring rates back to prepandemic levels of 3 percent, buyers can still look forward to an expected gradual decline throughout summer.

More inventory

People often prefer to list their homes for sale in spring and summer, which makes it a great time to go house hunting. However, in recent years sellers have been hesitant to list their homes for fear of giving up their comparatively low mortgage rates. Coupled with new-home construction issues and other factors, this has led to an ongoing shortage of inventory. The good news is that this may be changing soon as mortgage rates begin to drop. Lower rates could provide an incentive for homeowners interested in moving, adding much-needed inventory to the market.

More buyers
Though lower inventory often means greater competition among buyers, rising interest rates and surging prices scared a lot of them off in late 2022 and 2023. As noted previously, though, interest rates are coming down, and because inflation is predicted to fall across the country, many people may feel less financial pressure than they have previously. This may lead to a surge of buyers on the market, causing the competition to be fierce and bidding wars to spark back up. With housing prices expected to continue rising due to this high demand, buyers may want to act quickly to secure a property, even if it means paying a premium.

Higher prices

The market continues to see record-breaking highs. The median sale price for existing homes nationwide reached a staggering $384,500 in February 2024, making it one of the most expensive months on record. Much of these increases can be attributed to demand being greater than supply, with sellers hoping to capitalize on interest and buyers looking to outbid the competition. But even with inventory growing thanks to homeowners spurred to sell by lower mortgage rates, the expected flood of new buyers enticed by the same factor might offset any positive impact on pricing. As a result, home costs are unlikely to experience a significant decline. It would take a substantial increase in housing inventory for there to be an impactful price correction.

Remember, the housing market is a dynamic ecosystem, and summer 2024 may present unique opportunities amidst the ongoing challenges. By staying informed, exercising caution, and seeking professional guidance, you can navigate the current landscape and make informed decisions that align with your long-term homeownership goals.