It’s been a tough few years for homebuyers but the real estate game is finally shifting in buyers’ favor! With inventory levels climbing, mortgage rates on the slide, and competition starting to chill out, buyers are in a stronger position than they’ve been in years. If you’re gearing up for a home purchase, congratulations! But before you dive in, here are 5 things to know if you’re buying a house in the fall of 2024:
1. New Real Estate Agent Commission Practices
Nearly 90% of home buyers use a REALTOR to purchase a home according to the National Association of Realtors (NAR). Working with an agent is the best way to ensure that you have an advocate in your corner throughout your home purchase journey. But you should know that as of August 17th, 2024, there’s a new playbook for how agents are paid, and it’s going to impact you. Traditionally, the seller footed the bill for both their agent and yours. Now, it’s your responsibility to pay your own agent’s commission.
Does this mean you’ll need extra cash at the closing table? Maybe, but don’t sweat it just yet. You and your agent can negotiate how much they’re paid, and you can even ask the seller or their agent to pick up the tab when you make your offer. Ultimately you’ll just need to ensure your agent is paid, and you will be asked upfront to sign a contract agreeing to do so. So remember, read everything carefully, and don’t shy away from asking questions.
2. Homeowner’s Insurance: Natural Disaster Coverage
Insurance is a must, and because of the increase in billion-dollar weather disasters, homeowners insurance isn’t always as easy or cheap to get as it used to be. Some insurers are even dropping out of certain states entirely. So, before you fall in love with a property, make sure you’ve got a handle on what insurance will cost in your desired area. It’s crucial to factor this into your budget before you’re knee-deep in a contract.
3. The 2024 Presidential Election
Believe it or not, presidential elections don’t really ruffle the feathers of the real estate market. Yet, nerves sometimes get the best of people and some buyers hit pause in the months leading up to the election. This is your chance to swoop in! Sellers tend to be more motivated during the latter part of the year because they know buyer activity tends to dip in the fall and winter, even more so when an election is happening. Strike while the iron is hot and negotiate a great deal and better terms during this time.
4. Mortgage Interest Rates
Let’s talk rates. They peaked at nearly 8% last fall but are now trending downward. As of the publishing of this article, mortgage rates bottomed out at a 15-month low of 6.34%, but have increased just a bit since then. How much lower they’re headed will depend on the economy’s performance on many fronts. But, don’t expect the sub-3% glory days of 2021, those days aren’t coming back unless something major happens (let’s cross our fingers that it doesn’t). Here’s the strategy: buy now and refinance when rates dip further. Prices will increase over time, so you’ll likely score a better deal now and can save big when refinancing later.
5. Prices & Inventory
Home prices spiked to record highs this year but that growth has recently started to cool. Inventory has been on the rise and is expected to continue rising through October, which would follow typical seasonal trends. While inventory is still well below pre-pandemic levels, the reduced demand we’ve experienced due to high interest rates is responsible for the recent softened price growth. That being said, it’s not like home prices are losing ground. We will still see year-over-year price growth from 2023 [Altos Research], especially now that rates are falling and stoking some renewed demand. What happens with prices and inventory from here will depend on the health of the economy, wages, and mortgage interest rates so keep an eye on those figures.
Article Link https://www.forbes.com/sites/ryanserhant/2024/08/21/5-things-to-know-about-buying-a-home-this-fall/
The Bottom Line
Is now a good time to buy? That’s for you to decide! I’ll tell you this, though: Attempting to time the market is a fool’s errand. The best time to buy is when you are ready and the right house is available. The current market gives you more power than you’ve had in years—that’s a huge win in my book.
Ask yourself, “Am I ready to ride the waves?” If you can stay put during rough economic times, the rewards will come. Get yourself a rockstar agent, firm up that financial plan, and with some patience, fall 2024 might just be the perfect season to make your move.