Late 2024 Home Buying Predictions. Expert Q&A

Home buying in 2024’s second half

We reached the back half of 2024 and mortgage rates are finally trending down.

Will that continue? And what about home prices? Despite facing tough buying conditions in the last few years, “the desire to own a home is still strong,” according to Cornerstone Home Lending’s Jay Crowell.

We spoke with Crowell about facets of the housing market and his home buyer outlook for the rest of 2024.

Meet the expert

Jay Crowell is a senior vice president at Cornerstone Home Lending, a division of Cornerstone Capital Bank. Based in Seattle, he has more than 20 years of mortgage industry experience and has been recognized numerous times as a top producer. Jay and his team specialize in comprehensive mortgage planning and assisting borrowers with the purchasing and refinancing of their homes, vacation homes and investment properties.

Crowell shared his forecast on how different aspects of the housing market could look over the rest of 2024 in a Q&A with The Mortgage Reports. Answers have been edited for brevity and clarity.

How will interest rates shape the market in the coming months?

Almost everyone expects the Fed will cut rates in September, but the question is, by how much? The market is already preparing for a quarter-percent reduction (25 basis points), and maybe a similar reduction in December. If the Fed cuts rates by 50 basis points, it could significantly impact housing demand and mortgage production. But I don’t think that’s likely to happen. At the end of the day, the Fed has to be careful what they do to the U.S. dollar.

Will heightened demand (and potential home price growth) from lower mortgage rates offset the savings from interest rates dropping?

I believe so, because the prices of homes are going to go higher. We’re already seeing lower interest rates— in fact, they’re kind of being baked into the market based off of interest rate cut forecasting. My belief is we’re going to see more buyer demand and that’s going to quickly offset any interest rate savings. The right time to buy is always when you find a property that meets your needs. Waiting around for interest rates to go lower usually comes back to bite you.

Where are home prices headed for the end of 2024?

I expect to see relatively low price appreciation overall, although some markets will see higher price gains than others. For home sellers, real estate wins everywhere, but there are just some bigger winners in certain areas. There is a real revival happening in Midwest markets like Milwaukee, St. Louis and Oklahoma City, for example. Barring any major geopolitical events, what happens next with home prices will depend on interest rates and inventory.

How will buyer and seller behaviors shift?

I don’t see much change in home buyer and seller behavior, although we may see things cool down during the holiday months before rebounding in January. The desire to own a home is still strong. As far as the economy goes, I think we’re going to have inflation and debt issues for some time. Yet hard assets like real estate always perform well in these environments. Plus, when it comes to lifestyle improvements, nothing impacts American families as positively as homeownership.

How do you see the NAR settlement impacting home buyers and sellers?

I don’t think it will impact home buyers and sellers, at least not in our market. Real estate and mortgage professionals in the Greater Seattle area have already been preparing for it. Obviously, there will be situations where agents are going to want to slow down and make sure they have a buyer’s contract in place, but there has already been dialogue about that. We also have a game plan ready on how to address this issue from the financing side, so we don’t foresee it being a major hiccup. I see it as business as usual in the Pacific Northwest market. How it applies in other markets, I can’t say.

What’s the outlook of new housing inventory between the end of summer and early 2025?

Inventory will probably remain low for the rest of the year. New home construction has been slow since rates rose rapidly two years ago. Most homebuilders are waiting until after the election before trying to figure out what the next four years will look like. I don’t think we’ll see a significant increase in new housing starts until March of next year.

What should home buyers be mindful of in the second half of 2024?

I have four pieces of advice for buyers. First, study the market, because you really don’t understand your local market by looking at just a handful of houses. Second, find a pro real estate agent who is deeply plugged into your market and who will advocate for you. Third, don’t settle on the first home you find. But, lastly, buy as soon as you can. Even if rates are high, you can always refinance later.

Where do you see the refinance market going for the rest of 2024?

I don’t think it’s going to be huge. I think we’re going to see interest rates improve, so there will definitely be some refinance opportunities and some competition among lenders. But I don’t think there’s going to be some massive wave of refinancings. Most of the refis that have occurred so far are still cash-out refis. For a strategic refi, it comes down to our clients seeing an opportunity to save money on their mortgage payment.

What does the average 30-year FRM need to fall to in order to spark an influx of refis?

I believe rates have to get to below 6.5% before refinancing starts to make sense for a significant number of borrowers. At the same time, most people don’t want to see a huge cost associated with refinancing, meaning they don’t want to pay points or excessive fees. So, I think it’s going to be the low sixes with light costs before we see any real movement.

Would you recommend refinancing now or waiting?

It depends, but I recommend people be prepared and ready to go, because the window of opportunity can be very short. Already this year, there were days when we saw really great, attractive rates, and they were gone the next day. Sometimes that even happens within the same day. Start looking at your options now and get aligned with a mortgage advisor who will evaluate your needs and track the market for you. You want to be able to tell your mortgage advisor, “Look, as soon as I can get this rate, let’s go.”

How do you figure out the best refinance type for yourself?

The type of refinancing you get should be based on your needs and a consultation with a mortgage professional. My team’s focus is helping clients align their short- and long-term financial goals with their mortgage, and integrating their refinance into their overall strategy. It’s about looking at what a client is trying to do, how long they plan to be in their home, what their plans are for paying off their mortgage, and how they plan to utilize their loan.

The bottom line

While navigating the housing market can be tricky, knowing what you may expect could help your home buying journey.

In addition to these expert predictions, preparing yourself and learning how to negotiate can potentially save you both time and money.

If you’re ready to begin, talk to a local lender and real estate professional to get started.