Unlocking Homebuyer Opportunities in 2024
There’s no arguing this past year has been difficult for homebuyers. And if you’re someone who has started the process of searching for a home, maybe you put your search on hold because the challenges in today’s market felt like too much to tackle. You’re not alone in that. A Bright MLS study found some of the top reasons buyers paused their search in late 2023 and early 2024 were:They couldn’t find anything in their price rangeThey didn’t have any successful offers or had difficulty competingThey couldn’t find the right homeIf any of these sound like why you stopped looking, here’s what you need to know. The housing market is in a transition in the second half of 2024. Here are four reasons why this may be your chance to jump back in.1. The Supply of Homes for Sale Is GrowingOne of the most significant shifts in the market this year is how the months’ supply of homes for sale has increased. If you look at data from the National Association of Realtors (NAR), you’ll see how inventory has grown throughout 2024 (see graph below): This graph shows the months’ supply of existing homes – homes that were previously lived in by another homeowner. The upward trend this year is clear.This increase means you have a better chance of finding a home that suits your needs and preferences. And if the biggest reason you put off your home search was difficulty finding the right home, this is a big relief.2. There’s More New Home ConstructionAnd if you still don’t see an existing home you like, another big opportunity lies in the rise of new home construction. Builders have worked to increase the supply of newly built homes this year. And they’ve turned their attention to crafting smaller, more affordable homes based on what’s most needed in today’s market. This helps address the long-standing issue of housing undersupply throughout the country, and those smaller homes also offset some of the affordability challenges you’re feeling today.According to data from the Census and NAR, one in three homes on the market is a newly built home (see graph below):This means, that if you didn’t previously look at newly built homes as part of your search, you may have been cutting your pool of options by a third. Not to mention, some builders are also offering incentives like buying down mortgage rates to make it easier for buyers to get a home that fits their budget.So, consider talking to your agent about what builders have to offer in your area. Your agent’s expertise on builder reputations, contracts, and more will help you weigh your options.3. Less Buyer Competition Mortgage rates are still hovering around 7%, so buyer demand isn’t as fierce as it once was. And when you combine that with more housing supply, you have a better chance of avoiding an intense bidding war. Danielle Hale, Chief Economist at Realtor.com, highlights the positive trend for the latter half of 2024, saying:“Home shoppers who persist could see better conditions in the second half of the year, which tends to be somewhat less competitive seasonally, and might be even more so since inventory is likely to reach five-year highs.”This creates a unique opportunity for you to find a home you want to buy with less stress and at a potentially better price.4. Home Prices Are ModeratingSpeaking of prices, home prices are also showing signs of moderation – and that’s a welcome shift after the rapid appreciation seen in recent years (see graph below): This moderation is mostly due to supply and demand. Supply is growing and demand is easing, so prices aren’t rising as fast. But make no mistake, that doesn’t mean prices are falling – they’re just rising at a more normal pace. You can see this in the graph. The bars are still showing prices increasing, just not as dramatic as it was before.The average forecast for home price appreciation in 2024 is for positive growth around 3% to 5%, which is more in line with historical norms. That moderation means that you are less likely to face the steep price increases we saw a few years ago.The Opportunity in Front of YouIf you’re ready and able to buy, you may find that the second half of 2024 is a bit easier to navigate. There are still challenges, but some of the biggest hurdles you’ve faced are getting better as time wears on.On the other hand, you could choose to wait. But if you do, here’s the risk you run. As more buyers recognize the shift in the market, competition will grow again. On a similar note, if mortgage rates do come down (as forecasts say), more buyers will flood back into the market. So, making a move now helps you take advantage of the current market conditions and get ahead of those other buyers.Bottom LineIf you’ve put your dream of homeownership on hold, the second half of 2024 may be your chance to jump back in. Connect with a real estate agent to talk more about the opportunities you have in today’s market.
Why Fixing Up Your House Can Help It Sell Faster
If you’re thinking about selling your house, you should know there are buyers who are ready and able to pay today’s high prices. But they want a home that’s move-in ready. A recent press release from Redfin explains:“Buyers are still out there and they’re willing to pay today’s high prices, but only if the house is in really good shape. They don’t want to spend extra money on paint or new appliances.”It makes sense when you think about it. They’re having to pay a lot of money for a house in today’s market. That means they may not be able to easily afford upgrades after they move in. So, if your home is outdated or needs some work, buyers might pass it by or offer a lower price than you were hoping for.And there are a lot of homes that need upgrades right now. Millions are entering their prime remodel years, meaning they’re between 20 and 39 years old. Maybe yours is one of them. According to John Burns Research and Consulting (JBRC), the number of homes in their prime remodel years is high and growing (see graph below):If your house falls into this category, it's important to consider making selective updates to help it appeal to buyers, so it sells faster. But how do you know where to spend your time and money?Why You Need a Real Estate AgentBy working with a local real estate agent to be strategic about the improvements you make, you can be sure you’re making a smart investment. Put simply, not all upgrades are worth the cost. As Bankrate says:“Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them, or even lose money.” And, as that same Bankrate article goes on to say, that’s where a local real estate agent comes in:“. . . a good real estate agent will know what local buyers expect and can help you decide what needs doing and what doesn’t.”Your agent will know what buyers in your area are looking for and what they're willing to pay for it. By working together, you can avoid spending money on upgrades that won't pay off. Instead, they’ll fill you in on which changes will make your house more appealing and valuable.Bottom LineSelling a house right now requires more than just putting up a For Sale sign. You need to make sure it’s in good condition to attract buyers who are willing to pay today’s high prices.The way to do that is by making smart improvements that will give you the best return on your investment. Work with a local real estate agent so you know what buyers are looking for and what your house needs before selling.
How To Determine if You’re Ready To Buy a Home
If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. You’re thinking about your finances, today’s mortgage rates and home prices, the limited supply of homes for sale, and more. And, you’re juggling how all of those things will impact the choice you’ll make.While housing market conditions are definitely a factor in your decision, your own personal situation and your finances matter too. As an article from NerdWallet says:“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”Instead of trying to time the market, focus on what you can control. Here are a few questions that can give you clarity on whether you’re ready to make your move.1. Do You Have a Stable Job?One thing to consider is how stable you feel your employment is. Buying a home is a big purchase, and you’re going to sign a home loan stating you’ll pay that loan back. That's a big commitment. Knowing you have a reliable job and a steady stream of income coming in can help put your mind at ease when making such a large purchase. 2. Have You Figured Out What You Can Afford? If you have reliable paychecks coming in, the next thing to figure out is what you can afford. That’ll depend on your spending habits, debt, and more. To be sure you have a good idea of what to expect from a number's perspective, start by talking to a trusted lender.They’ll be able to tell you about the pre-approval process and what you’re qualified to borrow, current mortgage rates and your approximate monthly payment, closing costs to anticipate, and other expenses you’ll want to budget for. That way you can make an informed decision about whether you’re ready to buy.3. Do You Have an Emergency Fund?Another key factor is whether you’ll have enough cash left over in case of an emergency. While that’s not fun to think about, it’s an important thing to consider. You don’t want to overextend on the house, and then not be able to weather a storm if one comes along. As CNET says:“You’ll want to have a financial cushion that can cover several months of living expenses, including mortgage payments, in case of unforeseen circumstances, such as job loss or medical emergencies.”4. How Long Do You Plan To Live There?It was mentioned above, but buying a home involves some upfront expenses. And while you’ll get that money back (and more) as you gain equity, that process takes time. If you plan to move too soon, you may not recoup your investment. For example, if you’re looking to sell and move again in a year, it might not make sense to buy right now. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:“Five years is a good, comfortable mark. If the price of your home appreciates considerably, then even three years would be fine.”So, think about your future. If you plan to transfer to a new city with the upcoming promotion you’re working toward or you anticipate your loved ones will need you to move closer to take care of them, that’s something to factor in.5. Above all else, the most important question to answer is: do you have a team of real estate professionals in place? If not, finding a trusted local agent and a lender is a good first step. The pros can talk you through your options and help you decide if you’re ready to take the plunge or if you have a few more things to get in order first.Bottom LineIf you want to have a conversation about all the things you need to consider to determine if you’re ready to buy, connect with a local real estate professional.
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