HOMEBUYERS, HOME SELLERS, HOMEOWNERS, FINANCE, TRENDS
Navigating the 2024 Housing Market
In the new year, homebuyers and sellers are still facing the same challenges as they did in 2023—high interest rates, sky-high home prices, and an inadequate supply of homes. As affordability issues slow housing sales volume, low supplies are keeping home prices high.
Bankrate.com experts say that mortgage interest rates reached 8.01% in October, the highest level since 2000, but since then rates have come down. There’s no likelihood of a housing market turndown as long as lending standards remain strict, and there aren’t enough homes to meet demand. Goldman Sachs Research expects 30-year-mortgage rates to open 2024 at 7.6% and to end the year at 7.1%. Home prices will appreciate 2% in 2023, 1.9% in 2024, and 2.8% in 2025. If mortgage interest rates continue to ease, it’s likely that demand for homes will reignite, despite higher purchase prices.
The Federal Reserve’s aggressive handling of inflation by raising overnight borrowing rates to banks has had a positive effect, and further rate hikes appear unlikely as the numbers get closer to the Fed’s target of 2% inflation.
Meanwhile, help is out there for those being squeezed out of the market. FHA-guaranteed loans require as little as 3.5% down. Numerous state and local governments have increased programs for first-time and lower-income homebuyers. Many lenders offer grants, down payment assistance programs, and mortgages with no closing costs. The National Association of REALTORS® offers the Housing Opportunity Program, with resources for homebuyers.
For further advice, ask your Berkshire Hathaway HomeServices network professional.
HOMEBUYERS, TRENDS, NEW HOMES
How Important is a Large Home to You?
House sizes have come a long way from 1973 when the average home was 1,660 square feet. The average in 2015 was 2,687 square feet, and since then home sizes have fluctuated, according to the economy, mortgage interest rates, and overall affordability. The question is – how much space do you really need?
Automobiles with luxuries like 360 degree back-up cameras, lane change assists and tail-gating prevention have accelerated in price, and so have homes equipped with smart features, walk-in closets, en suite baths, and other can’t-live-without amenities. Homes are larger and come with more bedrooms – most homebuyers want at least three to four so they can use the extra rooms as offices, guest rooms, craft rooms and nurseries.
To help you decide how much home you really need, here are a few things to think about:
Larger homes may have better resale values, but they’re more expensive to maintain, so get a detailed home inspection to help you plan future replacement and repair costs.
Affordability is paramount. Buy a home that you can comfortably afford so you don’t have to live under economic pressure. Let your lender help you determine the most you should spend.
Larger homes tend to be located further away from urban city centers. Think about your commutes to and from work, schools, family, healthcare, etc.
Consider how long you plan to live in the home. The longer you occupy your home, the better it serves as a hedge against inflation while you build equity.
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