It’s been a rough few years for homebuyers, but the real estate business is finally turning in buyers’ favor! With inventory rising, mortgage rates falling, and competition easing, buyers are in a stronger position than they’ve been in years. If you’re getting ready to buy a home, congratulations! But before you get started, here are 5 things you should know if you’re buying a home in fall 2024:
1. New commission practices for real estate agents
According to the National Association of Realtors (NAR), nearly 90% of home buyers use a real estate agent to purchase a home. Working with an agent is the best way to ensure you have an advocate on your side throughout the buying process. However, you should know that starting August 17, 2024, there are new rules for paying agents that will impact you. Traditionally, the seller paid for both his agent and yours. Now it’s your responsibility to pay your agent’s commission yourself.
Does that mean you’ll need extra money when you close the sales contract? Maybe, but don’t worry just yet. You and your agent can negotiate how much they get paid, and you can even ask the seller or their agent to pick up the tab when you make your offer. Ultimately, all you need to do is make sure your agent gets paid, and you’ll be asked to sign a contract up front agreeing to this, so remember to read everything carefully, and don’t be afraid to ask questions.
2. Building insurance: natural disaster protection
Insurance is a must, and with the increase in weather disasters costing billions, getting homeowners insurance isn’t as easy or cheap as it once was. Some insurers are even pulling out of certain states, so before you fall in love with a property, be aware of what insurance costs in your desired area. It’s important to factor this into your budget before you’re neck-deep in a contract.
3. The 2024 presidential elections
Believe it or not, presidential elections don’t really shake up the real estate market. But sometimes nerves get the better of people and some buyers hold off in the months leading up to the election. This is your chance to strike! Sellers tend to be more motivated in the second half of the year because they know that buyer activity tends to slow down in the fall and winter, especially when an election is taking place. Strike while the iron is hot and negotiate a good deal and better terms during this time.
4. Mortgage interest rates
Let’s talk about interest rates. They peaked at nearly 8% last fall but are now trending downward. At the time of this writing, mortgage rates hit their 15-month low of 6.34% but have since risen slightly. How much further they will fall depends on how the economy performs on many fronts. But don’t expect the sub-3% glory days like in 2021, those days won’t come back unless something big happens (fingers crossed it doesn’t). Here’s the strategy: Buy now and refinance when rates continue to fall. Rates will rise over time, so you’ll likely get a better deal now and save big when you refinance later.
5. Prices and inventory
Home prices hit record highs this year, but that growth has cooled recently. Inventory has been rising and is expected to continue rising through October, which would follow typical seasonal trends. Although inventory is still well below pre-pandemic levels, the lower demand we have seen due to high interest rates is responsible for the recent slowdown in price growth. However, it is not as if home prices are losing ground. Starting in 2023, we will still see year-over-year price growth (Altos Research)
especially now that interest rates are falling and demand is reviving. What happens to prices and inventories from here on out will depend on the health of the economy, wages, and mortgage rates, so keep an eye on these numbers.
The conclusion
Is now a good time to buy? That’s up to you! But I’ll tell you this: Trying to time the market is a futile exercise. The best time to buy is when you’re ready and the right house is available. The current market gives you more power than you’ve had in years – that’s a huge win in my eyes.
Ask yourself, “Am I ready to ride the waves?” If you can stay put during tough economic times, you’ll be rewarded. Get a star agent, flesh out your financial plan, and with a little patience, fall 2024 could be just the right time of year to make your move.
