In the past year, a significant portion of home buyers and sellers observed from the sidelines, witnessing a decline in home sales momentum. This downturn, initiated by the Federal Reserve's interest rate hikes in 2022, coupled with soaring borrowing costs and record-breaking home prices, marked the most substantial real estate market deceleration since the 2008 recession [^2^].

The surge in home prices has priced out a generation of potential buyers, delaying their dreams of homeownership. Simultaneously, current homeowners, reluctant to relinquish their advantageous pandemic-era mortgage rates, have opted to wait, leading to a noticeable drop in property listings [^4^].

Hope is on the horizon, though. In December, the Federal Reserve signaled a halt to interest rate hikes and hinted at a potential 0.75% rate cut in the coming year. Although mortgage rates don't mirror the federal funds rate precisely, they often move in sync, suggesting the possibility of more affordable home loans in the near future [^5^].

Anticipated lower mortgage rates are expected to inject vitality back into the real estate sector. In this dynamic market, the key for home buyers and sellers is proactive engagement with real estate agents, leveraging their expertise, and maintaining flexibility to swiftly adapt to evolving conditions.

What does this mean for you?

Explore further to gain insights into the current state of the U.S. housing market, uncover potential opportunities for both buyers and sellers, and delve into economists' predictions for the upcoming year.

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