2023 In Review: Where Are We Headed in 2024?
What a year! Increasing interest rates throughout 2023 were a challenge for home buyers, especially first-time buyers and potential sellers as well. The market has been in a catch-22 situation in that many people wanting to purchase a new home were put off by higher interest rates than we’ve seen in many years. Many buyers decided to wait due to the high interest rates and the historical lack of inventory. Home sellers who had previously locked into affordable low-rate mortgages were an equal part of the issue. Sellers decided to remain in their current homes paying low mortgage rates instead of selling and having to take a mortgage at a higher interest rate when buying their new home. While homes were still being bought and sold, 2023 saw a stall in the market on both sides leading to an all-time high pent-up buyer demand. With interest rates seemingly at the core of this stalled market, it seems that continued reduction toward more affordable mortgages and more housing inventory would be the solution for both buyers and sellers.
For the best possible outcome in 2024 we first need to see a considerable increase in houses for sale. When more homes come on the market there will be a gradual leveling off of all time high prices. Continuing to move in the same direction as overall inflation, yet becoming more affordably within reach.
Also necessary would be interest rates returning to a closer to “normal” 5 to 6%. The demand for houses exceeds supply and this will probably not change until mortgage rates go down. Lower rates will bring more sellers and buyers into the market.
As we head into 2024 the National Association of Realtors has projected a 30-year mortgage rate to be between 6 and 7% by the end of 2024. The movement of interest rates is heavily influenced by the rate of inflation. If inflation rises, mortgage rates may not fall as quickly. If inflation is stabilized toward reducing, interest rates may fall sooner than expected. Home buyers and sellers should keep a close eye on the actions taken by the Federal Reserve and it’s ongoing regulation of financial markets.
Sellers that have a place to go or who will pay cash for their new residence should take advantage of the lack of supply and abundance of buyers. Home buyers who see something they truly love may consider financing at the best rate available today with an eye for refinancing when the opportunity arises.
Sellers should also be ready to put their best foot forward in the presentation of their home: get the little repairs done, clear out, organize and consolidate.
While attentively reviewing the listings that your real estate agent provides, buyers can continue to put money aside for their down payment, polish their credit history and obtain the all important pre-approval.
Work with a real estate agent to get your pricing right and marketing and advertising prepared. Your agent will assist you each step of the way while encouraging buyer competition to sell your home faster and for more money. Reach out now to get started!
John McHugh is a Senior Real Estate Agent with Coldwell Banker for over 23 years. He can be reached at [email protected] or 978.902.JOHN
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