2023 was one of the most challenging buyer’s markets in recent history, and rates are still at their highest since 2002. Will 2024 be a better year to purchase a home?
The good news is that a new Fannie Mae survey says that the fixed rate mortgage rate should settle to an average of approximately 5.7% and home prices rise only 2.4%, compared to 5.9% in 2023. According to BrightMLS, housing inventory will increase by 7.6% in 2024, adding an additional 90,000 listings to the market by the end of the year. The bottom line is if you need to purchase in 2024, you should expect a slightly lower rate with more inventory than what was seen in 2023.
If you proceed with purchasing a home in 2024, here are a few suggestions to consider:
Look at the first part of the year. Buying in the Spring and Summer is when most homes are bought and sold, creating a competitive market and high prices. Starting your search earlier in the year may net better results.
Take advantage of seller concessions. Since competition for home purchases will likely be about the same as in 2023, borrowers should investigate seller concessions. A seller concession is an amount the seller agrees to pay toward closing costs on the buyer’s behalf, including property taxes, loan origination fees, or inspection fees. Another seller concession is a 2-1 buydown, which is a mortgage agreement between the lender and borrower that provides a lower mortgage rate than is currently offered for the first year of the loan, then a somewhat higher rate the second year, and then the full rate for the third year and beyond. The seller pays for the buydown to allow for the lower rates.
Work with a professional, full-time realtor. The right realtor can make all the difference when purchasing in a challenging market. They can access thousands of listings on the multiple listing service (MLS) and hear about listings from other agents before they hit the MLS. And they will have the experience to negotiate in your favor.
It’s hard to predict how the economy and the housing market will progress in 2023, but staying informed and getting an early start is advantageous. If you have home purchase questions, talk to the experts at NASB at 888-661-1982 or click here for more information.