With spring right around the corner, homebuyers anticipate a busy season fueled by potential economic boosts, including anticipated interest rate cuts. People might also shift focus to house hunting, which almost every American looks forward to because prices might be more discounted at this time of the year.
Real estate agents suggest Super Bowl weekend marked the unofficial spring home-buying season of 2024. Despite lingering cold weather, increased home sales signal the spring market’s onset, urging prospective buyers to prepare.
In recent years, homebuyers and sellers faced fluctuating market conditions, from pandemic-driven seller dominance to historic shifts favoring buyers. Approaching the busy spring season, 2024 hints at a potential “seller sweet spot.” Opendoor’s surveys since 2021 revealed consistent seller intent until a notable 18% increase in December 2023, attributed to a desire to re-enter the market and pent-up demand.
Whether you’re a seller or buyer in this upcoming spring home-buying season, this article will list down everything you need to know when buying a home this spring.
Decreased List Prices
In anticipation of the spring homebuying season, more homeowners lowered their initial asking prices to attract buyers. Last month, 14.6% of listed homes in the U.S. experienced price cuts, marking an increase from the previous year. In January, 14.7% of homes on the market had reduced prices.
The increase in the share of home listings with lowered prices, exceeding averages since January 2017, benefits prospective buyers in an unaffordable market. Despite low inventory, reduced prices temper soaring home prices, indicating a shift towards a balanced market. Extremely low mortgage rates are also caused by biddings, which normally drive up median sales up to 42%. This is according to data from the years 2020 to 2022.
Chief economist at Realtor.com Danielle Hale also noted some price reductions as a sign that normalcy is returning in the housing market. The share of properties with lowered listing prices hit peaks in October 2018 and 2022, reaching 21.7% and 21.5%, respectively. Last year, this percentage surged to 18.9% in October amidst rising mortgage rates. Sellers adjusted prices to meet buyer expectations, a trend that could ease with anticipated mortgage rate declines.
What to Expect
The real estate market has been seeing some declines and shortages lately due to high mortgages and limited listings. While a potential spring rate drop could spur more listings, Realtor Maureen McDermut doubts it will fully meet demand. However, signs suggest increased spring selling, particularly among retirees motivated by rising demand and potential bidding wars.
Discussing how mortgage rate cuts may prompt increased homebuyer activity, potentially driving up home prices. Brian Shahwan, a mortgage banker, notes that while lower rates enhance affordability, they may intensify buyer competition, leading to higher prices. Thus, navigating the market requires careful consideration of these factors.
The real estate selling season traditionally kicks off post-Super Bowl, but data reveals heightened seller activity from April to June. In a notable trend shift, sellers show earlier engagement, with a 7% increase in Q1 planning from 2022 to 2023 — factors like interest rates, housing affordability and availability impact timing. A potential interest rate cut in 2024, following a peak in October 2023, influenced seller sentiment positively.
Seller Side Takeaways
For homeowners to embrace the selling season fervently, several scenarios could make 2024 a seller’s haven. A decline or stabilization in interest rates provides market assurance, as evident from the uptick in seller activity towards 2023’s end. Additionally, ongoing incentives for new home construction motivate homeowners to sell, easing affordability concerns.
Furthermore, moderating or plateauing steep rental rates may prompt renters to transition to homeownership, expanding the buyer pool. Moreover, the onset of the “Silver Tsunami,” with aging boomers considering downsizing or relocating, could significantly impact seller dynamics.
As the 2024 season unfolds, the convergence of these factors may redefine seller opportunities.
Buyer Side Takeaways
As for individuals looking to buy their dream houses this spring, they should know the real estate market typically surges with opportunities for buyers and sellers alike. With consumer sentiment about homebuying at its peak, 2024 promises an active season.
Normally, spring is the time when real estate is booming. This has drawn a number of buyers and sellers in the market due to the abundance of properties listed. Lower mortgage rates and cooled-off inflation drive sales increases. Buyers also expect more selection in house listings, ranging from apartments and condominium units to big family homes.
However, heightened demand can lead to fierce competition among buyers. Being pre-approved for a mortgage and working with a seasoned real estate agent can provide an advantage. Prioritize financial readiness by reviewing your credit report and budget to streamline the homebuying process.
Flexibility is critical as you embark on your home shopping journey. Be prepared to adjust search criteria and consider various neighborhoods. Remember, finding the perfect home may require patience and compromise.
Above all, embrace the home shopping journey during the vibrant spring season. Attend open houses, explore new areas and envision your life in a new home with excitement and optimism.
Spring 2024 Is the Best Time to Buy a House
Last year saw housing affordability dip to 1980s levels due to record-high mortgage rates and low inventory, resulting in 1 million fewer home sales than in 2022. However, this spring shows signs of improvement with slightly lower mortgage rates and a modest increase in available homes, boosting buyer confidence. While prices may not plummet, stability reigns, offering a more balanced market outlook, according to real estate experts.
According to Betty Jans, a Berkshire Hathaway HomeServices PenFed Realty agent, homebuyers should keep moving forward as significant price or rate drops aren’t anticipated. Waiting for minor adjustments might not be beneficial, as sudden dips could lead to increased competition later. Making a decision now might be wiser, suggests Jans.
The National Housing Conference offers a user-friendly calculator for potential homebuyers to determine their affordable mortgage based on monthly payments. Considering properties further from city centers may yield larger, better-condition homes at similar prices. Homes on the market longer or needing updates may offer favorable pricing.
However, prime locations for move-in ready homes often come at a premium with heightened competition.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.