Overcoming the Challenges of Homebuying in 2024
It's no secret that the past year has been tough for homebuyers. If you started the home search process but decided to pause due to the challenges of the current market, you’re certainly not alone. According to a Bright MLS study, many buyers halted their search in late 2023 and early 2024 for several reasons:
Difficulty finding homes within their price range
Struggles with making successful offers or competing with other buyers
Inability to find the right home
If any of these reasons sound familiar, here's some good news: the housing market is undergoing significant changes in the second half of 2024. Here are four key reasons why now might be the perfect time to jump back into your home search.
1. Growing Supply of Homes for Sale
One of the most notable market shifts this year is the increase in the supply of homes for sale. Data from the National Association of Realtors (NAR) shows a clear upward trend in inventory throughout 2024. This rise in available homes means you're more likely to find a property that suits your needs and preferences. If your primary challenge was finding the right home, this increase in supply is a significant relief.
2. More New Home Construction
If existing homes still aren’t meeting your needs, consider the growing number of new home constructions. Builders have been actively increasing the supply of newly built homes, focusing on smaller, more affordable options that align with current market demands. This effort helps address the long-standing issue of housing undersupply and mitigates some affordability challenges.
According to data from the Census and NAR, one in three homes on the market is now newly built. If you haven't previously considered new homes, you might have been overlooking a substantial portion of available options. Additionally, many builders are offering incentives like mortgage rate buy-downs, making these new homes even more appealing.
3. Reduced Buyer Competition
With mortgage rates hovering around 7%, buyer demand isn’t as intense as it once was. This, combined with the increased housing supply, reduces the likelihood of intense bidding wars. Danielle Hale, Chief Economist at Realtor.com, notes that home shoppers could see better conditions in the latter half of 2024, with inventory levels reaching five-year highs.
This scenario presents a unique opportunity to find a home with less stress and potentially at a better price.
4. Moderating Home Prices
Home prices are showing signs of moderation, a welcome change after the rapid appreciation of recent years. This moderation is driven by the growing supply and easing demand, resulting in more stable price increases. The average forecast for home price appreciation in 2024 is around 3% to 5%, aligning with historical norms. This trend means you're less likely to face steep price hikes compared to a few years ago.
The Opportunity Ahead
If you're ready and able to buy, the second half of 2024 offers a more favorable market environment. While challenges remain, many of the biggest hurdles are becoming less daunting.
On the flip side, waiting to buy carries its own risks. As more buyers recognize these positive market shifts, competition will likely increase. Similarly, if mortgage rates drop as forecasted, more buyers will enter the market. Acting now allows you to take advantage of the current conditions and get ahead of future competition.
Bottom Line
If you've put your dream of homeownership on hold, now might be the ideal time to resume your search. Connect with a real estate agent to discuss the opportunities available in today's market and make an informed decision about your next steps.
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