Unlocking Homebuyer Opportunities in 2024

Unlocking Homebuyer Opportunities in 2024

There’s no denying that the past year has been tough for homebuyers. If you began searching for a home but put your search on hold due to the challenges of today’s market, you’re not alone. According to a study by Bright MLS, 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

If any of these reasons resonate with why you paused your home search, here's what you should know. The housing market is transitioning in the second half of 2024. Here are four reasons why this may be your chance to jump back in.

1. The Supply of Homes for Sale Is Growing

One of the most significant market shifts this year is the increase in the months' supply of homes for sale. Data from the National Association of Realtors (NAR) illustrates how inventory has grown throughout 2024 (see graph below):

This graph highlights the months' supply of existing homes, which have previously been occupied. The upward trend this year is clear.

This increase means you have a better chance of finding a home that suits your needs and preferences. If difficulty finding the right home was the main reason you paused your search, this is a significant relief.

2. There’s More New Home Construction

And if you still don’t find an existing home you like, there’s another significant 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 meet today’s market demands. This effort helps address the longstanding housing undersupply issue and makes homes more affordable.

According to data from the Census and NAR, one in three homes on the market is a newly built home (see graph below):

This means that if you haven’t considered newly built homes in your search, you may have been overlooking a third of your potential options. Plus, some builders are offering incentives, such as mortgage rate buy-downs, to make homes more affordable.

Consider discussing with your agent what local builders have to offer. Your agent's expertise on builder reputations, contracts, and more will help you make informed decisions.

3. Less Buyer Competition

Mortgage rates are still hovering around 7%, so buyer demand isn’t as fierce as it once was. With increased housing supply, you have a better chance of avoiding intense bidding wars. Danielle Hale, Chief Economist at Realtor.com, highlights the positive trend for the latter half of 2024, saying:

“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 for you to find a home you want to buy with less stress and at a potentially better price.

4. Home Prices Are Moderating

Speaking of prices, home prices are also showing signs of moderation – and that’s a welcome shift after the rapid appreciation seen in recent years (see graph below): 

This moderation is primarily driven by supply and demand dynamics. As supply increases and demand eases, home prices aren’t rising as rapidly. However, it's important to note that prices are still on the rise, just at a more sustainable pace. This trend is reflected in the graph, where the bars indicate continued price increases, albeit less dramatic than in previous years.

The average forecast for home price appreciation in 2024 anticipates positive growth ranging from 3% to 5%, aligning more closely with historical norms. This moderation suggests a reduced likelihood of encountering the sharp price escalations observed in recent years.

The Opportunity in Front of You

If you're prepared to purchase a home, navigating the latter part of 2024 might be a smoother experience, despite ongoing challenges. Many of the major obstacles have begun to improve over time.

Alternatively, opting to delay comes with its own risks. As more buyers notice the evolving market dynamics, competition is likely to intensify. Additionally, if mortgage rates decline as anticipated, it could spur a resurgence in buyer activity. Acting now allows you to capitalize on current market conditions and stay ahead of potential future hurdles.

Bottom Line

It sounds like you're eager to re-engage with the housing market in the latter half of 2024. Let's connect to discuss the opportunities available to you right now.