There's no denying that this past year has been challenging for homebuyers. If you've recently paused your home search due to the difficulties of today's market, you're not alone. A Bright MLS study found that the top reasons buyers paused their search in late 2023 and early 2024 were:
- They couldn't find anything in their price range.
- They had no successful offers or found it difficult to compete.
- They couldn't find the right home.
If any of these reasons resonate with you, here's some good news: the housing market is transitioning in the second half of 2024. Here are four reasons why this might be the perfect time to jump back in.
1. The Supply of Homes for Sale Is Increasing
One of the most notable changes this year is the increase in the months’ supply of homes for sale. Data from the National Association of Realtors (NAR) shows a steady growth in inventory throughout 2024:
This graph illustrates the months’ supply of existing homes, previously lived-in properties, highlighting an upward trend this year.
This increase in inventory means you have a better chance of finding a home that meets your needs and preferences. If finding the right home was the main reason you paused your search, this is significant news.
2. More New Home Construction
If you still can’t find an existing home you like, there's another opportunity in the rise of new home construction. Builders have increased the supply of newly built homes this year, focusing on smaller, more affordable homes that address current market needs. This helps mitigate the longstanding issue of housing undersupply and affordability challenges.
According to data from the Census and NAR, one in three homes on the market is a newly built home:
If you haven't considered newly built homes, you may have limited your options significantly. Additionally, some builders are offering incentives like buying down mortgage rates to make new homes more affordable.
Consider discussing with your agent what builders have to offer in your area. Their expertise on builder reputations and contracts can help you weigh your options.
3. Less Buyer Competition
With mortgage rates hovering around 7%, buyer demand has decreased. Combined with increased housing supply, this means you're less likely to face intense bidding wars. Danielle Hale, Chief Economist at Realtor.com, notes a positive trend for the latter half of 2024:
“Home shoppers who persist could see better conditions in the second half of the year, which tends to be somewhat less competitive seasonally, and might be even more so since inventory is likely to reach five-year highs.”
This creates a unique opportunity to find a home with less stress and potentially a better price.
4. Home Prices Are Moderating
Home prices are showing signs of moderation after years of rapid appreciation:
This moderation is primarily due to growing supply and easing demand, resulting in slower price increases. While prices aren't falling, they are rising at a more normal pace. The average forecast for home price appreciation in 2024 is around 3% to 5%, aligning with historical norms. This means you’re less likely to face steep price increases compared to previous years.
The Opportunity Ahead
If you're ready and able to buy, the second half of 2024 may offer a more manageable market. While challenges remain, some of the biggest hurdles are improving.
Alternatively, you could wait. However, waiting carries risks. As more buyers recognize the market shift, competition will grow again. Similarly, if mortgage rates drop as forecasted, more buyers will re-enter the market. Acting now lets you take advantage of current conditions and get ahead of these potential buyers.
If you've paused your homeownership journey, the second half of 2024 might be your chance to jump back in. Connect with a real estate agent to discuss the opportunities available in today’s market.