As mortgage rates ease, Redfin Head of Economic Research Chen Zhao joined Yahoo Finance Live to discuss the 2024 housing outlook after a "largely frozen" 2023 market.

Zhao expects next year's homebuying season to be "better" than 2023 when inventory was low, rates were high, and prices sidelined buyers. As those headwinds abate, she anticipates a "transactions increase" in housing sales.

After a rapid acceleration in prices during the pandemic, Zhao predicts a 1% decline in prices for 2024. Zhao argues given high mortgage rates and high prices, housing has "hit a ceiling for affordability," and, as a result, prices can't really move much higher.

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

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For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

BRIAN SOZZI: Mortgage rates slightly easing. And more people listing their homes for sale. Redfin predicts 2024 will be the year home buyers can finally catch a break. From on all things housing, we're joined by Chen Zhao, Redfin head of economic research.

Good to see you here this morning. So what rates-- with that first rate cut potentially coming in the first half of 2024, Chen, how do you think that the spring and summer buying season will shape up?

CHEN ZHAO: Hi. Absolutely. Yes, so we think that 2024 home buying season is going to be better than what we saw in 2023, which was largely a frozen housing market for existing homes. Inventory was really low. Mortgage rates was really high. And home prices remained really high. So that kept a lot of buyers on the sidelines. What we're starting to see is, as I've mentioned, mortgage rates are starting to come down a little bit. We anticipate that continuing into 2024. And very importantly, we're starting to see a lot more homeowners come to Redfin agents to talk about potentially listing their homes. And we're seeing that rate substantially higher than it was in 2023.

So we think that the inventory for existing homes could be quite a bit higher in 2024 than in 2023, which should be welcome news for home buyers. And coupled with slightly lower mortgage rates, we think that will help to unfreeze the housing market a little bit. So we should see transactions starting to increase in 2024.