Buying a Home in 2024? Real Tips From a Real Estate Agent

If you’re trying to buy a home in 2024, get ready for a complex housing market, shaped by high prices, rising mortgage rates and the everpresent forces of supply and demand. 

With nearly 20 years of experience as a real estate professional, I’ve had the privilege of guiding many first-time buyers on their journey to homeownership. One key insight I’ve gained over two decades is that while homeownership can sometimes feel out of reach, the right timing and preparation can make anything possible.

Below, I’ll try to demystify the current state of the housing market, offering insights and strategies to navigate these turbulent waters.

What’s happening with home prices and supply? 

At the heart of the housing market are the twin pillars of supply and demand. Over the years, we’ve seen how these forces dictate market conditions, influencing everything from pricing to the pace of sales for buyers and sellers alike. The period leading up to 2024 has been no exception.

During the pandemic, ultralow mortgage interest rates led to a surge in buyer demand. But higher demand collided with a dwindling supply of available homes for sale. The imbalance has led to a competitive market. Multiple offers and bidding wars have become the norm, rather than the exception. 

Elevated prices are largely driven by limited inventory, a situation that doesn’t seem likely to change anytime soon. But the housing market should see some relative stability in the near term, with a modest appreciation in home prices by 3% to 5%. 

A significant factor contributing to low supply is the number of homeowners who are effectively “locked” into their current properties because they bought their homes with historically low mortgage rates. Those homeowners are disincentivized from selling because any new property they bought would likely come with a higher price and a much higher mortgage rate. 

It’s also important to understand that most sellers are simultaneously buyers. When someone sells a home, they usually buy another, meaning there isn’t a net increase in supply. The only time there’s a net increase is when new buyers enter the market without selling a property — a rare scenario except in cases of foreclosure, death or divorce. This dynamic ensures that, for the foreseeable future, the housing market will remain the same, with a slight upward trend in prices. 

 What’s happening with mortgage rates? 

Currently, mortgage rates are the hot topic in the homebuying process, primarily due to their rapid increase over the last few years, and their significant impact in making monthly payments less affordable. The surge in mortgage interest rates can be attributed to economic volatility, and factors like inflation and fluctuations in the job market aren’t likely to go away anytime soon.

Because of today’s high home loan rates, many buyers are contemplating whether it makes sense to pay points (also known as buying mortgage discount points) to lower their mortgage rates. My perspective is that it could be beneficial if it’s necessary to qualify for a loan. But because buying down the mortgage rate represents a sunk cost, I generally advise against it. 

If you’re in the market for a home, focus on what you can control rather than attempting to time the market perfectly. Consider whether your monthly mortgage payments are manageable, if you have sufficient savings and if you’re looking at homeownership with a long-term perspective.

Remember, there’s a good chance that refinancing opportunities could arise in the future, offering lower rates and better terms.

Top strategies for homebuyers

Preparation and strategy are key if you’re determined to buy a home in 2024. Here are some steps to improve your chances:

1. Find a trusted real estate professional

Partnering with an experienced agent can provide invaluable insights and guidance. Look for a professional with a deep understanding of the market trends as well as local nuances. Early and open communication with your real estate agent about your preferences, budget and requirements can help them identify suitable properties more effectively, potentially giving you early access to listings.

2. Get mortgage preapproval

In a competitive market, being preapproved for a mortgage can give you a crucial edge. Though you can start househunting getting preapproved first, a mortgage preapproval demonstrates your seriousness and financial readiness to sellers, making your offer more appealing.

3. Improve your financial situation 

Use the time leading up to your purchase to work on…