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 range
They didn’t have any successful offers or had difficulty competing
They couldn’t find the right home
Stats show things are starting to change, here’s what you need to know. The housing market is in a transition in the second half of 2024. Buyer activity is increasing. Here are some of the reasons why buyers are realizing that this may be an opportune time to jump back in.
One 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 buyers have a better chance of finding a home that suits their needs and preferences. And this being the biggest reason most buyers put off their home search, this is a big shift.
Another shift in the housing market 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):
Mortgage rates are still hovering around 6.75%, 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 buyers to find a home they want to buy with less stress and at a potentially better price.
Speaking 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. This 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 buyers are less likely to face the steep price increases we saw a few years ago.
If you’re ready and able to buy or sell, 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 we’ve faced are getting better as time wears on.
Waiting runs the risk of more buyers recognizing the shift in the market, and competition growing 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.
Repeating this from last week just in case you missed it!
There are 3 great new options for dining on the East Shore! Bruschettas is the new authentic Italian restaurant, previously Ivanos on Lower Kingsbury. It has been completely remodeled and offers fine dining including homemade pasta and vegetarian and vegan options. Castle Rock Creamery is a small-batch artisan ice cream shop in the Round Hill shopping center, founded by seasoned chef Josh, who brings over 30 years of culinary expertise. This is not just for the kiddos with flavors like Salted Carmel White Russian and Bourbon Peach Pecan Pie! So good! Also in the Round Hill shopping center Notty’s Italian Burrito, basically a pizza rolled up and baked as a burrito. I was pleasantly surprised and will definitely be going back.
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