Here’s What I Think Will Be the Top Real Estate Trends of 2024

The Midwest Comeback, Smaller Homes, & The Rise of Co-living.

Sitting at my desk this afternoon, I began piecing together a picture of what 2024 might look like for the real estate industry.

And before you assume, I’m not your typical realtor who throws around my “expertise” or tries to gain a reputation as an expert.

Instead, I’m a freelance writer for brokerages and a licensed mortgage professional, which gives me a unique outlook.

Rising home prices and interest rates are currently affecting the market, making it difficult for first-time buyers and adding a layer of uncertainty for everyone.

Low inventory is another puzzle piece in some cities, keeping the market fiercely competitive.

And with the Fed’s constant interest rate hikes in response to inflation, the cost of borrowing money keeps climbing.

I have to admit we’re in a complex place, but what can we do?

It’s the world we’re navigating right now.

Naturally, I’ve been observing trends, talking to industry insiders, and analyzing the numbers.

Here are my predictions for what the future might hold for buyers, sellers, and real estate as a whole.

Prediction One: More people will start moving to the Midwest.

Historically, the Midwest has experienced a steady exodus over the past few years.

From 2010 to 2020, the region witnessed a significant demographic shift, losing around 400,000 people to other parts of the United States.

Illinois, Michigan, and Ohio were particularly impacted.

The primary catalyst for this movement was better job prospects and living conditions, as people wanted brighter opportunities.

After all, this isn’t the sunniest place to live.

However, recent trends indicate a reversal of this pattern. Thanks to several factors, the Midwest is becoming an attractive destination again.

Affordability is a huge draw.

Here, the cost of living is remarkably lower than in popular areas. The average price of a spacious family home is $279,900, compared to the national median of $398,000.

In some coastal cities, that kind of cash might get you a cozy apartment — cozy as in ‘I-can-touch-both-walls-at-once’ cozy.

As someone who moved away and then moved back, I have a renewed appreciation for what the region offers, not just in terms of affordability but also quality of life.

The connection to nature and emphasis on a balanced lifestyle is very appealing in our fast-paced world.

People are sick of the daily grind, paying for an overpriced concrete box in the sky and morning traffic.

In the Midwest, you’re not just buying a house. You’re buying room to breathe, space to grow, and the chance to enjoy your mornings without the soundtrack of honking horns.

Ever since I moved back to Ohio, I have gone to the park a lot more than when I lived in Texas and California.

And the air is good here because of all the trees!

None of the Midwest's cities are considered major outside of Chicago, so you have no choice but to slow down.

You’d be surprised to learn there are many outdoor activities to enjoy year-round, from boating on Lake Erie in the summer to skiing in the Poconos in the winter.

But on a serious note, there’s really nothing else to do outside of working, drinking, and eating, so you might as well enjoy the free gifts provided by Mother Nature.

Prediction Two: People will start to purchase smaller homes.

Let’s talk about the growing trend of smaller living spaces. As home prices keep climbing, it’s like we’re all playing a massive game of Twister, trying to find a spot that fits.

With interest rates still high, many people can’t afford to buy traditional homes.

So, what’s the response?

A growing shift toward smaller, more affordable homes like condos, apartments, and cute life-sized dollhouses.

For example, recent data from NAR shows the sales of existing homes with less than three bedrooms increased 32% in July 2023.

That’s the largest annual increase in this category since 2003.

Developers are really tuning into this wave by building more affordable housing units.

According to Zillow, construction of new homes with less than three bedrooms increased by 9.5% this year.

Many state and local governments also offer help through tax credits, zoning changes, grants, and other programs.

My favorite so far is L.A. County’s green light for homeowners to build and sell ADUs.

I’ve written a few articles about this for a client specializing in new construction. I must say, I love this trend.

Less space equals less hassle and money I have to spend when something breaks. Plus, since you live so close to your neighbors, there’s a chance to actually get to know them.

Prediction Three: Co-living will become normalized.

Lastly, let’s talk about co-living. Before I dive into the details, let me share a bit of my personal history with this.

I’ve tried co-living not once, not twice, but three times.

And each time?

Let’s say it was like trying to mix oil and water.

That may say a lot about me, or perhaps I chose all the wrong people.

Regardless, I missed every shot with this.

Despite my sitcom-worthy adventures, co-living is gaining serious traction.

According to NAR, the number of unmarried couples in the U.S. buying homes has shot up 30% over the last decade, and this trend is going nowhere anytime soon.

In fact, a 2021 survey by coliving.com found that nearly 40% of respondents aged 18–34 are open to living with friends or a partner to afford homeownership.

This trend is expected to keep growing as more people delay or avoid marriage altogether.

I know people with more “traditional” morals are against this, but guess what?

Housing is expensive!

It’s easier to split the rent and share the household responsibilities, especially if you’re with each other all the time anyway.

But enough about my predictions — I want to hear from you!

What are your thoughts on these trends? Are you considering moving to the Midwest, downsizing to a smaller home, or maybe even trying co-living?

Drop a comment and share your take on the future of real estate.