Amidst the dread of an impending new year recession (sound familiar?), anxieties about its potential ramifications on the housing market have understandable emerged. Fueled by concerns that rising unemployment might unleash a wave of foreclosures, feelings of uneasiness have steadily begun to take hold. As we navigate through these apprehensions, however, it is imperative to examine the available data before succumbing to widespread panic.

Economic Forecasting Survey

Insights from economic experts are invaluable to understanding why worry for the housing market in 2024 should be minimal. In fact, economists are cautiously optimistic about the United States’ economic outlook. According to Wall Street Journal’s most recent Economic Forecasting Survey, a sharp uptick in Gross Domestic Product (GDP) is expected, with a 2.2% increase in the fourth quarter of 2023 compared to the year prior—eclipsing the average 1% growth forecast in the last quarterly survey.

While economists have slightly adjusted their GDP growth forecast for the next year to 1%, down from 1.3% in July, the consensus remains that the economy will continue to expand in 2024 and into 2025. 

Unemployment is projected to rise but stay just above 4%, indicating overall job market stability. These projections provide a nuanced understanding that, while job losses may occur, they are not anticipated to reach levels that could precipitate a housing market crash. 

Increase in Bankruptcies

The situation with regard to bankruptcy rates appears more reassuring than one might anticipate as well. A closer look at the actual numbers of Bankruptcies Below Pre-Pandemic Levels dispels the notion that the financial challenges faced by industries and small businesses during the pandemic resulted in a significant increase in bankruptcies. 

Contrary to fears, the figures for 2021 and 2022 were lower than in typical years, a phenomenon attributed in part to the government’s injection of trillions of dollars in aid to individuals and businesses during the pandemic. The impact of this financial aid ultimately provided a cushion against a dramatic surge in bankruptcies, subsequently playing a pivotal role in maintaining stability. Consequently, bankruptcies today remain far below the levels we witnessed pre-pandemic.

Onward and Upward

Beyond the alarming headlines, it is important to recognize that many statistics are projected as higher (and scarier) than they really are. As we head into the new year, it is critical to keep these facts in mind to alleviate unnecessary anxiety and put your mind at ease. Remember to approach the data with a discerning eye and an understanding that, despite challenges, measures are in place to safeguard against a housing market collapse.

No matter what the economic outlook has in store for 2024, Nicole and the team at NMC stand ready to help you navigate the housing market with expert guidance, exclusive insights and quality customer support. Contact NMC Realty Group today!

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