3 smart times to buy a home in 2024
2023 was a difficult year for homebuyers and owners looking to refinance. Thanks to high inflation and elevated interest rates designed to help rein it in, mortgage rates rocketed upward, hitting their highest point since 2000 and remaining close to that level for the rest of the year.
However, inflation has been steadily dropping in recent months (although it rose slightly in December). Still, inflation has dropped so much from a decades-high in June 2022 that the market and buyers started pricing in rate cuts to come this year.
While no one knows when mortgage rates will fall this year — or by how much — there are still some better times to buy a home than others. But those specific times may look a little different in 2024 than they normally would. Below, we'll detail three smart times to buy a home this year.
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3 smart times to buy a home in 2024
Here are three times you may want to buy a home in 2024.
January 2024
Mortgage interest rates have leveled off this month following a disappointing inflation report for December. But the average rate for a 30-year mortgage is around 7% as of January 18, which is lower than the approximate 8% it had been last fall.
That said, rates could soon rise again. If the Federal Reserve views the latest inflation numbers as an indication that more work needs to be done — and not just a temporary concern — they could raise the benchmark interest rate range yet again (it currently sits at a 22-year high between 5.25% and 5.50%).
If they do that in their meeting at the end of January, then borrowers could expect February mortgage rates to increase, too. This makes now a better time to act, if only to lock in today's "lower" rates. Buyers who do so can always refinance in the future when the rate market stabilizes.
Explore your mortgage rate options online now to learn more.
The spring
The spring is traditionally a popular time for homebuying. This is when many owners elect to sell their homes and inventory increases. If the Fed does decide to cut rates, it could also be the time when the first rate cut of 2024 comes.
While a 25 basis point cut in March, for example, may not result in dramatic cuts to mortgage rates, every dollar helps. Combined with a presumed increase in inventory, then, the spring of 2024 could be a smart time for homebuyers to act.
When you've found your dream home
Your ideal dream home doesn't go on the market every day. But what if it does, albeit in this rate climate? Should you still act?
According to many experts, you should take the opportunity and buy the home anyway. This could be one of the smartest times to act. Experts recommend taking a "date the rate and marry the home" approach should you find yourself in this scenario.
In other words, it makes sense to buy the dream home and take the (temporarily) high rate. By doing so you can secure the home you want and then, again, refinance when rates eventually come down again. Granted, this opportunity may not come along this year — or at all — but when it does, it's a smart time to act.
The bottom line
As is the case with many personal financial decisions, the timing is relative. While the above times may work for one buyer, they may not be as ideal for others. Still, 2024 is a unique year and the timing for buyers may be unique, too. January could be a good time to act, if buyers anticipate rates climbing upward again. But the spring could also work if inventory increases and rates are finally cut. Finally, no matter the year, buyers should strongly consider moving when their dream home presents itself. By keeping these considerations in mind, buyers will better position themselves for their future home purchases.
