Undoubtedly, the previous year presented its fair share of challenges for homebuyers. If you've recently embarked on the house hunting journey, you might have hit the pause button due to the overwhelming hurdles in today's real estate market. Rest assured, you're certainly not the only one in this boat. According to a study by Bright MLS, some key reasons why buyers halted their search in late 2023 and early 202

  • Unfortunately, they couldn't find anything within their budget.

  • They didn't receive any successful offers or struggled to compete.

  • They were unable to locate a suitable home.

If any of these reasons made you pause your home search, here's the scoop: the real estate market is shifting in the latter part of 2024. Here are four factors that might just make now the perfect time for you to dive back in.

1. The Supply of Homes for Sale Is Growing

The market has seen a notable change this year with the increase in the number of homes available for sale. Data from the National Association of Realtors illustrates the growing inventory trend in 2024, as depicted in the graph below.

The graph illustrates the inventory of pre-owned homes available for sale each month. It's evident that there has been a noticeable increase in inventory over the course of this year.

The rise in available homes improves your chances of finding a home that meets your needs and preferences. If struggling to find the right home was the main reason for delaying your search, this development should come as a significant relief.

2. There’s More New Home Construction

Builders have been focusing on constructing more new homes this year to meet the increasing demand. They're building smaller, more affordable homes to address the housing shortage nationwide and help with the current affordability issues in the market. If you haven't found an existing home you like yet, exploring new home construction could be a great option for you!

Based on information provided by the Census and NAR, approximately one-third of homes currently available for sale are newly constructed properties, as shown in the graph below.

If you haven't considered newly constructed homes in your search, you may be limiting your options significantly. Additionally, some builders provide incentives such as lowering mortgage rates to help buyers find a home that suits their budget better.

Feel free to discuss with your agent the various offerings from builders in your local area. Your agent can provide valuable insights on builder reputations, contracts, and other important details to assist you in making informed decisions.

3. Less Buyer Competition

Mortgage rates are currently staying at approximately 7%, which is helping to ease the intense competition among buyers. With the increased housing supply, the likelihood of getting into a bidding war is reduced. Danielle Hale, Chief Economist at Realtor.com, points out the encouraging trend for the second half of 2024, stating:

“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.”
— Danielle Hale, Chief Economist at Realtor.com

This presents a great chance for you to discover a home you love, with reduced stress and possibly a better price.

4. Home Prices Are Moderating

Speaking of prices, home prices are also displaying signs of moderation. This shift is welcomed following the rapid appreciation witnessed in recent years, as illustrated in the graph below.

This moderation is primarily a result of supply and demand dynamics. Supply is increasing while demand is stabilizing, leading to a more gradual increase in prices. It's important to note that prices are not decreasing; they are simply rising at a more sustainable rate. This trend is clearly reflected in the graph, where prices continue to trend upwards, albeit at a less dramatic pace compared to previous periods.

The typical prediction for home price increase in 2024 points to a rise of approximately 3% to 5%, aligning more closely with past trends. This slower growth suggests a reduced possibility of encountering the sharp price surges seen in recent years.

The Opportunity in Front of You

In the latter part of 2024, buying a home might be a bit smoother for you. While there are still obstacles, some of the major challenges are gradually improving as the year progresses.

Alternatively, you can opt to hold off. However, there's a potential downside to this waiting game. With increasing buyer awareness of the market change, competition is likely to intensify once more. Moreover, if mortgage rates indeed decrease as predicted, a surge of buyers will reenter the market. Acting promptly allows you to capitalize on present market dynamics and stay one step ahead of other potential buyers.

Bottom Line

If you've postponed your dream of owning a home, the latter part of 2024 could be your moment to reengage. Let's discuss the current market opportunities.