Real estate buyer agents play an essential role in helping you navigate the complexities of…
The real estate housing market in 2024 is experiencing some interesting shifts. Typically, home buying activity slows down as the summer months end and we move into the fall. However, this year is different. Lower mortgage rates and an increase in housing inventory are giving buyers more opportunities to find their ideal homes, even in what is traditionally considered the “offseason.”
These changes are making homes more affordable, with lower monthly payments, more options, and better negotiating power for buyers. While the market is still competitive, especially for well-priced homes in desirable areas, there are some clear signs that the housing market is beginning to balance out. Let’s dive into how these trends are affecting both buyers and sellers and what opportunities are available right now.
Lower Mortgage Rates Are Helping Buyers
Mortgage rates have been a major concern for many potential homebuyers in recent years. Higher rates mean larger monthly payments, and for some, it can make owning a home seem out of reach. However, there’s good news: rates have started to fall. According to Zillow’s latest market report, the average monthly mortgage payment has decreased by over $100 since May 2024. In places like San Francisco, known for its expensive housing market, the drop is even more significant — more than $300 less per month.
This decline in rates has improved the affordability of homes across the country. Buyers now have more purchasing power, which means they may qualify for better homes than they could just a few months ago. If you’ve been holding off on buying a house due to high mortgage rates, now could be a great time to take advantage of the lower rates and make that move.
Inventory Is Increasing, Offering More Choices as Mortgage Rate Drops Continue
In addition to lower mortgage rates, buyers are also seeing more homes available on the market. This increase in inventory provides more options, which is not always the case during the late summer and early fall. Typically, the housing market slows down as the year progresses, but 2024 is proving to be different. The number of homes on the market has been increasing steadily, and by August, there were nearly 1.18 million homes available, the highest since September 2020.
For buyers, this is a big deal. More inventory means less competition for homes, which can make the buying process less stressful. You might have more time to make decisions and even negotiate better deals. It’s important to act fast when you find a home you love, but with more homes available, there’s less pressure to jump on the first listing you see.
Why This Is a Great Time for Buyers
The combination of lower rates and increased inventory creates a unique opportunity for homebuyers. Here are some key benefits of buying a house now:
- Improved Affordability: With rates dropping, many buyers can now afford homes that were previously out of their price range. A lower rate can make a significant difference in your monthly mortgage payments, freeing up more money for other expenses or allowing you to consider a more expensive home.
- Less Competition: More homes on the market means buyers may have less competition when making an offer. This gives you more time to decide and negotiate, potentially resulting in a better deal.
- Longer Time on the Market: Homes are staying on the market a bit longer than they did in recent years, giving you more opportunities to find the right property without feeling rushed.
- Price Cuts Are Common: While price cuts were becoming more frequent in the earlier months of 2024, they have slowed slightly since August. Still, about 26% of homes listed in August had price reductions, which can work in buyers’ favor.
Sellers Also Have Opportunities
Though the current market is leaning towards buyers, sellers still have plenty of reasons to feel optimistic. Well-priced homes are still selling quickly, especially in competitive markets. In fact, homes that are priced right and marketed well are selling in about 20 days, which is almost a week faster than homes typically sold before the pandemic. Additionally, over a third of homes that sold in July went for more than the asking price.
Lower mortgage rates could drive more buyers into the market this fall, leading to increased competition for available homes. Sellers who are ready to list their homes now may find that they can still command a high price, especially if their property is in a desirable location.
The Changing Housing Market and Its Impact on Buyers Amid Mortgage Rate Fluctuations
The real estate market has been shifting steadily over the past few years. The pandemic played a huge role in creating unprecedented demand for homes, leading to skyrocketing prices and fierce competition among buyers. But as we move through 2024, changes in mortgage rates suggest the market is settling into a more balanced state.
Zillow’s data indicates that the market has shifted from favoring sellers to a more neutral territory. Homes are still selling relatively quickly, but they are taking a bit longer to go under contract compared to recent years. In August, homes were taking about 20 days to sell, two days longer than in July. However, this is still faster than the pre-pandemic average, showing that demand remains strong.
For buyers, this means they now have a bit more leverage when negotiating prices and terms. However, attractive homes in hot markets are still seeing a lot of interest, so it’s essential to stay prepared and move quickly when you find the right home.
Fall May Extend the Buying Season
Traditionally, the housing market sees a significant drop-off in activity as summer ends and the cooler months approach. But this year, the combination of lower mortgage rates and increased inventory may extend the buying season into the fall. Buyers who might have been priced out of the market earlier in the year due to higher mortgage rates are now finding that they can afford to buy a house.
This shift means that we might see more competition among buyers in the coming months. As the report suggests, the autumn “cooldown” may be slower than in previous years. With more buyers entering the market, especially those motivated by lower mortgage rates, competition could increase. Despite the seasonal changes, sellers might still find themselves in favorable positions.
What Buyers Should Keep in Mind
While the current market conditions are favorable for many buyers, it’s essential to approach the process with a clear strategy. Here are some tips for buyers looking to take advantage of the current market:
- Get Pre-Approved for a Mortgage: Before you start looking at homes, make sure to get pre-approved for a mortgage. This will give you a clear idea of how much you can afford. It will also make you a more attractive buyer when you make an offer.
- Work with a Real Estate Agent: A knowledgeable real estate agent can help you navigate the complexities of the market and find the best deals. They can also assist with negotiations and ensure you’re making informed decisions.
- Stay Flexible: While it’s great to have a wish list for your future home, it’s also important to remain flexible. The more open you are to different neighborhoods or home features, the better your chances of finding a great deal.
- Don’t Rush: While it’s important to act quickly when you find a home you love, don’t let the pressure of competition make you rush into a decision. Take your time to weigh your options and ensure you’re making the right choice for your future.
Conclusion
The housing market in 2024 is shaping up to be exciting. Lower mortgage rates and increased inventory are giving buyers more options and opportunities. While competition remains strong for attractive homes, the market is starting to balance out, offering more favorable conditions for buyers.
Whether you’re a first-time homebuyer or looking to upgrade your current home, now could be a great time to make a move. Stay informed and work with a trusted real estate agent to make the most of the current market conditions. This approach will help you find the home of your dreams.
The National Buyers Agents Association can help make this process easier. NBAA connects you with top local real estate agents who are well-suited to your needs and preferences. Visit the NBAA website today to start your journey toward finding your dream home and make the most of the current housing market.