4 important homebuying tips for 2024

Buying a home is a big deal, no matter when you do it or what stage of your life you're in. For those looking to buy a house right now, though, it can be especially stressful. Mortgage rates and housing prices are both high while the housing supply is running low. Put together, this creates an environment that can give potential buyers nightmares. 

"The biggest issue is going into 2024 you'll still have a hard time finding the house that you want at the price that you want at the interest rate that you want," says Doug Duncan, senior vice president and chief economist at Fannie Mae, a government-backed mortgage lender. 

That said, there are some tips you can follow to make buying a house easier next year.

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4 homebuying tips for 2024

First things first – it isn't going to get much easier to buy a house in 2024. The environment is not going to improve significantly, at least not right away. Heeding these tips, though, will leave you in a better position to get the best deal possible while you shop for a home.

Consider waiting until the second half of the year

One of the major reasons mortgage rates are so high right now is because the Federal Reserve has raised federal lending rates repeatedly over the past 18 months. In their most recent meeting, the Fed declined to raise rates, but they also didn't choose to cut rates. In 2024, though, the Fed has indicated that at least two rate cuts could come.

"In the latter half of 2024, things will start to pick up," Duncan says. "We're not talking gangbusters, but in the growth direction." 

Duncan did note that the Fed is trending towards a policy of "optionality," where they can raise or cut rates as the economy dictates, rather than sticking to a rigid plan. If rate cuts do come, though, expect them towards the back half of the year – and better mortgage rates would be likely to follow. 

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Buy when you're ready

All that said, Duncan says that trying too hard to time the rate market isn't the best option, especially if your goal is to get into your own home and live there.

If you sit around waiting for rates to be ideal, "you've moved from being a homebuyer to being a speculator."

You simply can't be sure when rates are going to go up or down, so if you find a home that you like that you can afford, that is the right time to make your move – you can always refinance later if rates go down drastically. 

New construction offer some unique advantages

With the supply of existing homes low, Duncan says potential buyers – especially potential first-time buyers who aren't coming in with any equity – should look to new construction to potentially find deals. He noted that some builders are offering lower prices for homes missing cosmetic touches like granite countertops and finished basements. 

"A first-time buyer is not looking for attributes; they're looking for financing," he says. 

Homebuilders can offer better deals to customers by buying down part of the rate. This benefits the builders, whose business relies on putting people into the homes they build and moving on to the next project, along with buyers, who get a new home with less interest. 

Shop around for the best rates

Chances are you wouldn't buy the first car you look at or, to be frank, the first house you look at. Rather, you'll look around and find the deal that works the best for you. The same should be true for your mortgage lender. Duncan says he has never purchased a home without speaking to at least a few lenders and that he has always gotten a better rate than the first one he was offered. 

Make sure to keep notes of what is offered to you so that you can bring those rates to subsequent lenders – you can potentially play them off of each other to leave you in the best possible position. 

The bottom line

Buying a home is an exciting time for anyone, but it's also nerve wracking. As the calendar turns from 2023 to 2024, now is an especially difficult time for those looking to buy a new place to live. Between high mortgage rates and low availability, it is enough to make anyone reconsider their plans of buying a place. There are tips you can follow, though, to make the process significantly easier – as long as you find the right deal for you and your situation.