As the new year begins, prospective homebuyers are faced with the dilemma of whether to take advantage of the current downward trend in mortgage rates or wait for further improvements in the housing market. Buying a home in early 2024 could potentially allow buyers to beat the rush, as the market may become more crowded if rates continue to drop. However, waiting could offer more options as the supply of homes improves and mortgage affordability increases.
Jo-Ann M. Marzullo, a real estate attorney at Ligris + Associates, advises caution when buying a home while rates are high, as it could put buyers at risk if they are not financially secure. While it is difficult to predict the exact direction of mortgage rates and home prices, many experts believe that rates will decrease this year, although not to the levels seen during the pandemic.
Cody Horvat, a licensed real estate broker at The Scott Group, a division of Compass, expresses optimism about mortgage rates but does not expect them to drop significantly unless the Federal Reserve changes its stance on inflation. He predicts that rates will slowly move towards the low 6% range throughout 2024. On the other hand, opinions on real estate prices are more varied and may differ from city to city.
Colin Lee, the managing director at New Gables Capital, a private commercial real estate lender, believes that prices may not increase on a national level and some markets could even see a decline of 5% to 10%. However, Horvat anticipates that lower mortgage rates will drive up prices in many cities across the United States. He suggests that home prices will either remain stable or continue to rise, as the previous high rates in the 7% range deterred many buyers in 2023, but the cooling of rates is now attracting them back into the market.
Given these conditions, the homebuying landscape in 2024 is expected to be a mixed bag, influenced by factors such as location and financial position. It is crucial for prospective buyers to carefully consider their options and assess their individual circumstances before making a decision.
