Daryl Fairweather, chief economist for real estate brokerage Redfin, will be presenting at the upcoming 2024 ULI Housing Opportunity Conference in Austin. A classically trained economist with both a Ph.D. and a master’s degree in economics from the University of Chicago, Fairweather previously worked at Amazon and the Federal Reserve Bank of Boston.
Fairweather shared her predictions for the 2024 housing market in December 2023. In a January phone interview, Urban Land caught up with her on what has changed so far in 2024, and how she’s feeling about her predictions.
“Not much has changed in the last month, but there was a bit of an improvement in mortgage rates at the end of 2023,” said Fairweather. That boosts the chances for one of her predictions, that U.S. home sales will increase and end the year up by five percent. Another one of her predictions was that mortgage rates would fall but remain above six percent.
Much has been made of the lock-in effect of low mortgage rates for recent buyers and those who refinanced, but Fairweather says that will ease in 2024. “Rate lock-in effect will fade, life happens,” says Fairweather. “People will find a reason to sell and move.”
Fairweather sees prices rising in markets that are still affordable and less exposed to climate events, such as Albany and Rochester in New York and Grand Rapids, Michigan.
Fairweather also predicted that 2024 will be a year to destigmatize renting. With insurance costs and property taxes rising in many coastal markets, Americans don’t see all of the tax advantages they once did from owning. Younger Americans have also seen other ways to invest their savings, whether in crypto or more traditional investing products. Fairweather predicts, “[for Gen Z] many will decide that renting and investing their money in other ways makes the most sense.”
While lower interest rates could boost affordability and inventories, Fairweather is a also an advocate for many of the regulatory reforms that could unlock more development in cities. In 2022, Fairweather made the case for land-value taxes in an opinion piece for Business Insider, and was also quoted in the New York Times on this topic. Detroit is one large American city considering shifting to a land value tax.
Fairweather anticipates this becoming a ballot issue for 2024 elections, saying in her predictions, “[C]ongressional candidates will focus on housing affordability. They will introduce policies similar to those in cities and states that have made progress, like Minneapolis, Oregon and California, which are among the places that have ended most single-family-only zoning.”
Learn more about innovations in housing at the 2024 ULI Housing Opportunity Conference.
