There’s no arguing that this past year has been difficult for homebuyers. If you’re someone who started the process of searching for a home but put your search on hold because the challenges felt too much to tackle, you’re not alone. A Bright MLS study found that some of the top reasons buyers paused their search in late 2023 and early 2024 were:
- They couldn’t find anything in their price range.
- They didn’t have any successful offers or had difficulty competing.
- They couldn’t find the right home.
However, the real estate market is dynamic, and 2024 is bringing new opportunities for homebuyers. Here are some key factors that might make this year the right time to restart your home search:
1. The Supply of Homes for Sale Is Growing
One of the most significant shifts in the market this year is how the months’ supply of homes for sale has increased. Data from the National Association of Realtors (NAR) shows how inventory has grown throughout 2024:
This graph displays the months’ supply of existing homes – those previously lived in by another homeowner. The upward trend this year is clear, indicating that more options are becoming available for prospective buyers.
2. There’s More New Home Construction
If you still don’t see an existing home you like, another big opportunity lies in the rise of new home construction. Builders have worked to increase the supply of newly built homes this year. They’ve shifted their focus toward crafting smaller, more affordable homes based on what’s most needed in today’s market. This helps address the long-standing issue of housing undersupply throughout the country, and those smaller homes also offset some of the affordability challenges buyers are facing today.
According to data from the Census Bureau and NAR, one in three homes on the market is a newly built home:
This increase in new home construction offers you more variety and potentially better fits for your needs and budget.
3. Less Buyer Competition
Mortgage rates are still hovering around 7%, so buyer demand isn’t as fierce as it once was. When you combine that with more housing supply, you have a better chance of avoiding intense bidding wars. Danielle Hale, Chief Economist at Realtor.com, highlights this positive trend for the latter half of 2024, saying:
“With a more balanced market, buyers are likely to face fewer multiple-offer situations, giving them a better chance to secure a home at a fair price.”
4. Home Prices Are Moderating
Home prices are also showing signs of moderation – a welcome shift after the rapid appreciation seen in recent years:
The average forecast for home price appreciation in 2024 suggests a positive growth rate of around 3% to 5%, which is more in line with historical norms. This moderation means you are less likely to face the steep price increases seen in previous years, making homes more accessible.
While 2023 presented significant challenges for homebuyers, 2024 is shaping up to be a year of new opportunities. With increased home inventory, more new constructions, reduced buyer competition, and moderating home prices, now might be an ideal time to revisit your home search.
By staying informed about these market shifts, you can take advantage of the evolving landscape and find the perfect home to meet your needs and budget. Happy house hunting!