In the month of January, new home sales rose less than expected, with only 661,000 new homes sold. With mortgage rates remaining close to 7%, potential homebuyers may still be wary to enter the US housing market. Could 2024 continue the housing trends seen from last year?

National Association of Realtors Chief Economist Lawrence Yun joins Yahoo Finance to share insights into housing market trends expected for this year.

In terms of housing demand, Yu states: "There is definitely a large degree of pent-up demand, along with even delayed sellers, sellers who have life-changing circumstances — having additional child in the family, maybe a retirement age, maybe a new job that requires different commuting patterns — so all these delayed sellers are waiting for the rates to drop before listing their home, along with many buyers. The home sales closing activity is reflecting the interest rate of what was occurring in December."

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 Nicholas Jacobino

Video Transcript

SEANA SMITH: Real estate existing home sales rising just a smidge though to start the year. So yes, the tick up in new home sales wasn't exactly as high as the Street had been forecasting, but we are edging I guess you can say in the right direction. Does this at all point to maybe a more positive, slightly stronger housing market that we could expect in 2024?

LAWRENCE YUN: I mean, there is definitely a large degree of pent up demand along with even delayed sellers. Sellers who have life-changing circumstances having additional child in the family, maybe a retirement age, maybe a new job that requires different commuting patterns. So all these delayed sellers are waiting for the rates to drop before listing their home along with many buyers.

Because the home sales closing activity is reflecting the interest rate of what was occurring in December. Again, it was lower but now here in late February, higher mortgage rates beginning to bite into some of the contract signings for new home sales. But let's also keep in mind that new home sales had their third best year since the foreclosure crisis of 2008 just last year. So this is clearly implying that there is a demand if inventory is available.

BRAD SMITH: Well, what does this mean in this interim period of time about some of the home improvement projects that people might even take on? And we think through how some of our viewers may be receiving this data and how it passes through to some of the stocks that we track, whether that be Home Depot or Lowe's, or even the home builders out there and Toll Brothers, Lennar and so forth where there's going to be this concerted focus on where-- if you're not getting back into the housing market right now, where you are spending to perhaps enhance your own home ownership experience?

LAWRENCE YUN: You know, multiple offers are still happening on those mid-price home and below. And also is very good thing that the builders are beginning to focus more on the mid-priced home rather than those expensive McMansions.

So the medium prices have actually come down reflecting the builders focusing on more smaller-sized home. So that's a very good sign and that's where the demand is heaviest. But the fact that there are multiple offers on the existing homes is implying that not all demand is being satisfied, we need more inventory, and certainly, builders are helping on that inventory front slowly.

BRAD SMITH: Is 2024 from your outlook going to be the year where millennials are able to really fully throw pitches out there, or even get into, as you mentioned, some of those mid-tier priced, new homes that are in construction?

LAWRENCE YUN: I think 2024 will certainly be better than last year. The mortgage rate overall environment even though there is wee-to-week fluctuation should be lower, measurably lower this year compared to last year. And again, that supersensitivity, mortgage rate comes down. We have a rush of buyers going into the market.

We just need to ensure that there's more supply, especially at the local government level, whether it is trying to ensure that there is no overly burdensome regulation that prevents builders from getting into the market, maybe looking at some of the zoning regulations. But we need to ensure that more supply come onto the market, and that's how one makes the millennial generation, younger adults to have a better chance at ownership opportunity.