Will 2023 or 2024 Be a Good Time to Buy a House?
Home prices and mortgage rates have soared to historic highs in recent years. This has made the housing inventory scarce. As a result, both potential sellers and aspiring buyers are understandably apprehensive about the present state of the housing market.
Should you buy a house in 2023 or wait until 2024? The answer isn’t easy and depends largely on many factors. In fact, home prices, mortgage rates, and housing inventory will all significantly influence housing affordability in the upcoming year. But where will these trends lead, and when will it be a good time to buy a house?
Is 2024 a Good Year to Buy a House?
Whether you buy a house in 2024 depends largely on mortgage interest rates. Mortgage rates doubled in 2022 due in part to the Federal Reserve’s efforts to combat inflation, and they have remained elevated.
As of July 2023, the median sale price for existing homes in the United States reached $406,700. This was the highest July price ever recorded by the National Association of Realtors (NAR). By late August, the average 30-year mortgage rate had surged to 7.36 percent, a level not witnessed in over two decades.
However, there is anticipation that the Fed’s campaign against inflation may soon end, which could result in lower mortgage rates. Despite this potential rate drop, buyers may not see much relief in 2024.
High interest rates do more than just affect buyers. It impacts the number of sellers on the market. Sellers may hesitate to give up their current low-interest rates when interest rates are high. As a result, home sales volume has declined significantly in 2023, even though prices remain stable.
Existing home sales dropped by 16.6 percent year-over-year in July 2023. However, experts suggest that if mortgage rates decrease as expected, it could lead to increased activity in the housing market in 2024. Lower mortgage rates are anticipated to attract more buyers and sellers, potentially increasing transactions and providing much-needed inventory to the market. This, in turn, may stimulate housing sales activity in 2024 compared to 2023.
Should I Buy a House Now or Wait?
Deciding whether to buy a house is a significant choice that involves assessing your financial status, market conditions, and your long-term goals. To make an informed decision, consider the current housing market and your family’s circumstances.
Evaluating Market Conditions
Understanding the present housing market is essential. Here are key factors to consider:
- Interest Rates: Monitor interest rate trends; low rates make homeownership more affordable, while high rates increase monthly payments.
- Home Prices: Examine local price trends; stability, expected changes, and affordability are crucial considerations.
- Inventory Levels: Consider the availability of homes for sale, which can affect competition and prices.
- Economic Conditions: Evaluate factors like job stability, local job market trends, and overall economic indicators.
Considering Your Financial Situation
In addition to assessing the market and current real estate trends, you must evaluate your financial situation. Assess your income, credit score, and savings for a down payment, closing costs, and emergencies. Create a detailed budget to determine your comfortable monthly mortgage payment, including taxes, insurance, maintenance, and utilities.
Buy Now If:
- Interest rates are low.
- You’ve saved for expenses.
- The local market is stable.
- Homeownership aligns with your long-term goals.
You May Want to Wait Until 2024:
- Interest rates are high, with expectations of a decrease.
- Your financial situation needs improvement.
- The local market is volatile or declining.
- Your long-term plans are uncertain.
What If I Need to Buy a House in 2023?
Sometimes, life throws us unexpected curve balls, and you may need to move or purchase a home in 2023. While higher mortgage rates will reduce your buying power, you must focus on what you can control.
If you choose to buy a home in 2023, shop around and try to get the best interest rate possible. Use online calculators to determine if you can comfortably afford the mortgage payments. Then, lock in your rate to safeguard against potential rate increases.
When Should You Contact a Real Estate Attorney?
Contact a real estate attorney before signing any agreements, as contracts may contain concealed terms and conditions. Identifying and negotiating these hidden terms before committing to an agreement is imperative because it becomes legally binding once a contract is signed. Therefore, any adverse terms left unaddressed can leave you vulnerable.
For this reason, we strongly recommend consulting a real estate attorney at our law firm at the outset of the agreement process. We can help you avoid pitfalls and secure the most favorable terms through negotiation. While contracts may be intricate legal documents, skillful negotiation is possible, and our attorneys are equipped to negotiate on your behalf to ensure the best possible outcome.
How Can John Park Law Real Estate Lawyers Help?
Whether you are in the process of buying, selling, or leasing commercial or residential property, the real estate attorneys at John Park Law possess the expertise required to champion your cause. We leverage our extensive knowledge of Nevada real estate law and employ robust negotiation strategies to secure optimal results for our clients.
We know that real estate is a significant investment. That’s why we place your needs at the forefront of our practice. To explore your options and discover how we can help you achieve your real estate goals, please contact us at 702-857-7879 today. Your real estate success is our priority.
John Park is a highly experienced attorney in estate planning, probate, business law and guardianship to help people organize the elements of their lives through careful estate planning and asset protection measures.