After a tumultuous 2023, Realtor.com Chief Economist Danielle Hale joins Yahoo Finance Live to evaluate the housing market outlook for prospective buyers in 2024 amid lowering rates.

Per a Realtor.com survey, 61% of first-time home shoppers feel "very optimistic" about purchasing in 2024, with 95% confident they can own eventually despite affordability challenges. Hale notes mortgage rate volatility creates difficulty planning, but advises buyers to "rate-proof" budgets accounting for rate/price changes. While climbing rates stifled demand last year, she says the recent downtrend is "fueling optimism" around renewed accessibility.

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

Editor's note: This article was written by Angel Smith

Video Transcript

- Meanwhile, the housing market taking a beating in 2023 with low sales volume, high prices, and tight inventories. But a new report out today highlights the best markets for first-time buyers in 2024. For more on that report, we're talking to one of its authors, realtor.com Chief Economist Danielle Hale.

Danielle, it is good to see you. So you actually-- you all surveyed the potential first-time homebuyers, Danielle. What do they have to tell you as we head into 2024? Are they feeling more optimistic?

DANIELLE HALE: Absolutely. So first-time homebuyers told us that they were, in fact, very optimistic. 61% said that now is a good time to buy a home for our recent realtor.com survey. And while affordability continues to be a challenge, even though we've seen some improvement as mortgage rates have come down, 95% of prospective first-time homebuyers feel like they'll be able to afford a home within their lifetime. 40% saying they're planning-- they're going to be able to afford it within the next year. So first-time homebuyers are bringing a lot of optimism to the market in 2024.

- Hey, Danielle. It's Julie here. How should people think about the sort of up and down that we have been seeing in mortgage rates, right? Like, yes, I know the longer trend is a little bit down. But there's some volatility there. So how are homebuyers approaching that?

DANIELLE HALE: Yeah, and the volatility can make it really difficult for homebuyers to plan to purchase because it's really hard to set a budget when mortgage rates are moving up and moving down. So my recommendation or advice to consumers is to really try to rate proof your budget and consider a couple of different scenarios. These can have pretty wide-ranging effects on your budget if you were to compare, say, October's high of 7.79% mortgage rates with the low that we saw at the end of December. You're looking at an $80 a month difference for every $100,000 that's borrowed.