top partner

for CFD

Image source: Getty Images

I can’t believe I’m writing this, but we are coming up on the end of 2023. It feels to me as if this year went by in the blink of an eye, but since I’ve got big plans for 2024, I’m ready for it to be over. In short, I’m planning to buy a house in 2024. And while this may not be the best time, broadly, I’m ready nonetheless.

Let’s take a closer look at the factors influencing whether you, too, should take the plunge into homeownership in the new year.

It’s not great for buyers right now

If you’ve been watching the housing and mortgage markets the last few years, you’re likely discouraged by how everything’s been going. After a pandemic-fueled buying frenzy spurred by ultra-low mortgage rates, we opened 2022 with an average rate of 3.22% on a 30-year fixed mortgage loan, according to data from Freddie Mac.

But then rates started to climb — by the end of 2022, the average rate for that same mortgage had nearly doubled to 6.42%. And following the trend line through 2023, we saw a pretty steady rise. As of this writing, that same rate is now 7.5%, per Freddie Mac. This means a far more expensive mortgage rate if you buy now. But what about next year?

What will the 2024 market look like?

I don’t have a crystal ball, but I do have the ability to find mortgage predictions from some of the biggest names in the business. For example, Fannie Mae’s October Housing Forecast predicts a slight drop in mortgage rates to just under 7% by the third quarter of 2024. The National Association of Realtors’ Economic Outlook calls for rates under 7% by the middle of the year, and perhaps as low as 6.3% by the end of 2024. The Mortgage Bankers Association is predicting a drop below 7% for all of 2024, and rates perhaps as low as 6.1% by the end of the year.

While no one is predicting a return to those 3% rates we saw just two years ago, this is a step in the right direction. Ideally, as rates drop, more homeowners will list their properties for sale, improving the inventory problem (as of September, there was just a 3.4-month supply of homes, according to NAR — a four- to six-month supply is needed to equalize the market). It makes sense that people are hesitant to give up a low mortgage rate they may currently have, even if it means getting into a different home. So it will likely become easier to find a home to buy if rates drop next year.

How do your finances look?

Regardless of how the market shakes out in 2024, your own finances and your wants/needs for a home should play a major role if you’re trying to decide if this will be your year to buy. First and foremost, your credit, savings, and income are all extremely important. Your credit score and credit profile will inform whether you’ll be approved by a mortgage lender and what rate you’ll get. Your savings determine how much money you can put down on a mortgage loan. And your income will influence how much you can afford in ongoing monthly mortgage payments.

The time to start getting ready to buy a house in 2024 is now. If your credit score needs a little work, spend some time with your credit report and look for errors that you can have removed (credit report errors are common and can drag your credit score down). Resolve to make all your bill payments on time, and try to pay down some existing debt, as this will improve your debt-to-income ratio (very important for getting a mortgage).

If you want to buy a home in 2024, you likely already have some money saved for a down payment and closing costs. If you can be more flexible with your timeline, and perhaps intend to wait until the second half of the year to strike, you have more time to save. I met my house savings goal a few weeks ago, but I’ve resolved to keep saving, because I’m well aware of how expensive homeownership will be.

So, should you buy a home in 2024?

I hate to say it, but — it depends. If your credit score is rock solid and you’ve got a robust savings account balance, it could be the right time. Be sure to shop around with the best mortgage lenders to get yourself the best rate possible, and lock in a pre-approval to make your offers on houses stronger. Good luck!

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Read the full story: Read More“>

Blog powered by G6

Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.

For any inquiries, please contact [email protected]