Is It a Good Time to Buy a House? How to Prepare for the 2024 Market

March 8, 2024 - 5 min read

From fluctuating prices to interest rate shifts, the current state of the real estate housing market has left many wondering: Is it a good time to buy a house?

Opinions are mixed.

Some people think it’s a decent time since prices have calmed down a bit in some areas, even if just a tad. But according to others, rising interest rates are reason enough to hold off until later.

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In this article:

What’s going on in the housing market today?

Some who’ve kept an eye on the recent real estate housing market are hesitant to take the plunge into homeownership. One key reason for this has been the surge in mortgage rates.

In early March 2024, the typical 30-year fixed mortgage rate stood at 6.88%, as reported by Freddie Mac. These interest rates are higher than what we’ve seen in over twenty years.

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Despite the Federal Reserve’s decision to hold off on raising the federal funds rate in January, some experts anticipate that mortgage rates will likely move sideways, remaining above 6.5% through this quarter and drifting down to about 6% by year end.

In addition to increasing mortgage rates, home prices are also on the rise.

The Case-Shiller U.S. National Home Price NSA Index indicated that home prices in 17 out of the 20 major metro markets reported month-over-month price decreases in December 2023. The median existing-home price for all housing types in January was $379,100, an increase of 5.1% from one year ago, as reported by the National Association of Realtors (NAR).

New construction homes commanded even higher prices, with a median sale price of $420,700 in January 2024, according to the National Association of Homebuilders (NAHB).

While the demand for homes remains strong, the available supply struggles to keep pace. According to NAR data, in January, there were only enough unsold existing homes to last 3.0 months, which is much lower than the balanced supply level.

A lack of homes for sale, especially in popular areas, can limit choices for homebuyers and lead to higher prices.

Furthermore, the increase in mortgage rates is causing homes to stay on the market for a longer time, which is leading to a decrease in home sales.

All of these factors are collectively shaping the housing market in 2024.

Predictions for the 2024 real estate market

You’re not alone if you’re still pondering: Is it a good time to buy a house? Predictions from Zillow suggest that the average home value is anticipated to increase by approximately 4.9% in 2024. It’s important to note that these forecasts may differ based on location.

Despite anticipation for a more stable housing market, affordability remains a concern. Mortgage rates—while possibly cooling off—are also projected to stay elevated in 2024, which could be challenging for some Americans, especially first-time homebuyers.

Demographic trends, like the preferences or housing choices of millennials who make up a significant portion of potential homebuyers, will also play a role in how the real estate housing market evolves.

Will mortgage rates fall in 2024?

Will mortgage rate go down? Although there are some indications that interest rates might stabilize or experience a slight decrease in 2024, there are no guarantees.

And even if there’s a modest decline, interest rates are expected to remain high compared to recent history.

This situation can make affordability hard for some homebuyers. High interest rates can limit how much they’re able to borrow, thus delaying their entry into the housing market.

On the flip side, if interest rates drop significantly, this could boost demand and flood the market with homebuyers—which can drive up home prices.

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Factors to consider when preparing to buy a house in 2024?

Long-term goals and lifestyle are critical considerations when making important life decisions, especially when it comes to becoming a homeowner. These factors play a significant role in shaping your future and determining the type of home that best suits your needs.

Here are some key aspects to ponder:

Personal financial readiness

Assess your overall financial health and stability. Are you ready for the long-term financial commitment of homeownership? Consider your income, savings, and existing debt-to-income ratio before making a decision.

Long-term goals and lifestyle

When considering whether it is a good time to buy a house, think about your family size, location preferences, and future plans. Will your family expand, or will you change careers or relocate soon?

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Create a budget for your mortgage, as well as your maintenance, insurance, and property taxes. This ensures you have enough money for all house-related expenses, as well as other personal expenses.

Credit score

Monitor and improve your credit score by addressing debts and credit issues. A higher score can lead to lower interest rates, which could save you thousands over the life of your mortgage. Learn what’s a good first-time home buyer credit score here.

Down payment preparation

A significant down payment reduces borrowing and interest costs. You’ll need a minimum of 3% to 10% down, depending on the home loan program. Explore down payment assistance programs and grants by state to check if you qualify for funds.

Realistic expectations

Speak to a local real estate agent and research current real estate market conditions, such as housing inventory and home pricing trends. Additionally, prepare for potential challenges, such as limited inventory, higher home values, rising interest rates, and increased competition.

Bottom Line

There’s no way to predict the direction of the housing market in 2024. However, several factors point toward home prices remaining stable or experiencing modest increases, rather than significant drops.

This expectation is driven by supply-and-demand dynamics within the housing market. Limited inventory coupled with steady demand are likely to send home prices upward.

Also, if the Fed continues its efforts to keep inflation under control, the presence of higher mortgage rates can contribute to keeping home prices relatively stable.

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Should I buy a house in 2024 or wait?

Deciding whether to buy a house in 2024 or wait depends on your circumstances. It’s worth noting that mortgage interest rates are expected to slowly drift down, which could help affordability for aspiring buyers. As for home prices, they might remain stable or see modest increases.

To make the right choice when it comes to a home purchase, assess your financial situation, long-term goals, and your local real estate market. Although waiting to buy could result in lower mortgage rates in the future, it’s important to weigh this possibility against potential competition and a limited supply of available homes.

Is the housing market going to crash in 2024?

According to current insights and forecasts, there’s no indication that the housing market will crash in 2024. Instead, the evidence suggests that home prices will remain stable or moderately increase due to limited inventory and steady demand.

What will mortgage rates be in 2024?

Currently, predictions point to the possibility of mortgage rates trending down compared to the highs we’ve experienced last year. But there are no guarantees, so it’s important to watch market trends, Federal Reserve actions, and market conditions.

If you’re thinking about buying a home, prepare for the possibility of higher rates and consider your personal finances before applying for a mortgage.

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Valencia Higuera
Authored By: Valencia Higuera
The Mortgage Reports contributor
Valencia Higuera is a freelance writer from Chesapeake, Virginia. As a personal finance and health junkie, she enjoys all things related to budgeting, saving money, fitness, and healthy living.
Aleksandra Kadzielawski
Updated By: Aleksandra Kadzielawski
The Mortgage Reports Editor
Aleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience in mortgage and real estate to help consumers discover the right path to homeownership. Aleksandra received a bachelor’s degree from DePaul University. She is also a licensed real estate agent and a member of the National Association of Realtors (NAR).