Morgan Stanley: Housing Affordability Seen Improving in 2024 as Mortgage Rates Fall, Home Prices Drop Slightly
• Morgan Stanley analysts forecast a rare improvement in housing affordability in 2024 as mortgage rates fall from 2022 highs.
• They expect home prices to drop modestly as new home construction outpaces existing home sales.
• Falling mortgage rates could unleash pent-up demand as rate-locked sellers list homes, boosting inventory.
• Analysts forecast single-family housing starts could jump 10% in 2024, contributing to a home price decline.
• Persistent affordability issues and supply constraints may limit the extent of any price drop or even push prices up 5%.