2023 Property Market Insights: To Buy Now or Wait for 2024?

Nikka Sulton

2023 Property Market Insights: To Buy Now or Wait for 2024?

The dilemma of whether to buy a home now or wait until 2024 has become a pressing question in today’s real estate market. Home prices surged during the pandemic, and efforts by the Federal Reserve to combat inflation have led to rising mortgage rates.

This combination has inclined many potential buyers to lean towards waiting. According to the Fannie Mae Home Purchase Sentiment Index released in September, over 80% of consumers believe that it’s currently a disadvantageous time to purchase a house.

However, recent developments have started to tip the scales in favor of buyers in various regions. Days-on-market figures have increased substantially, granting buyers more time to make informed decisions. Cities on the West Coast, such as Seattle and San Francisco, which witnessed soaring prices, have experienced double-digit year-over-year price declines. Additionally, a report from real estate company Knock suggests that over 30 U.S. metropolitan areas will likely become buyer-friendly by year-end. These areas include desirable locations like Atlanta, Charlotte, Dallas, and Phoenix.

So, should you seize the opportunity to buy a home now, or would it be wiser to bide your time in anticipation of potential price or rate drops? Moreover, what if an economic recession looms on the horizon? Here are some essential factors to consider when making this significant decision.

Is now a good time to buy a house?

Mortgage rates have reached a 22-year high, with rates in early September being particularly steep. Concurrently, home prices are once again on the rise, marking five consecutive months of increases according to the latest Case-Shiller U.S. National Home Price NSA Index. Given these conditions, it’s understandable if you’re hesitant about buying a home right now.

However, regardless of the current real estate market dynamics, opting to buy at this juncture offers distinct advantages. Firstly, it allows you to commence building equity immediately. Additionally, it helps you avoid potential future mortgage rate hikes, which can significantly impact your monthly budget and result in higher interest payments over the loan’s duration.

Stacey Froelich, a broker with Compass in New York City, advises against delaying a purchase, emphasizing that attempting to time the market is an uncertain endeavor, and a home should be viewed as a long-term investment.

Melissa Cohn, regional vice president of William Raveis Mortgage in Connecticut, offers valuable insight by stating, “You ‘Marry the house and date the rate.'” In other words, while rates may fluctuate, you can always explore refinancing options later. This perspective underscores the importance of considering the long-term benefits of homeownership in the face of current market conditions.

Assessing Current Market Conditions

When contemplating a home purchase, it’s crucial to grasp the current housing market dynamics. Here are key factors to weigh:

1. Interest Rates:

Mortgage interest rates profoundly impact home affordability. Presently, closely monitor interest rate trends. Lower rates enhance affordability, whereas higher rates can inflate monthly payments.

2. Home Prices:

Assess local home price trends. Are prices presently elevated or stable? What are the future price expectations? Grasping these trends informs your purchase timing.

3. Inventory Levels:

Evaluate available homes. A limited inventory can intensify buyer competition and raise prices. Conversely, more inventory offers more choices.

When considering a home purchase, it’s vital to understand the current housing market dynamics. Here are essential factors to consider:

4. Economic Conditions:

Assess the broader economic landscape. Factors like job stability, local job market conditions, and overall economic indicators can influence your long-term ability to meet mortgage payments.

Your Personal Financial Situation

When contemplating a home purchase, it’s essential to consider your personal financial situation alongside market conditions:

1. Financial Readiness:

Evaluate your financial stability. Do you possess a reliable income and a strong credit score? Have you saved sufficient funds for a down payment, closing expenses, and potential unforeseen expenses?

2. Long-Term Objectives:

Contemplate your long-term aspirations. How does homeownership align with your overall financial strategy? Do you plan to stay in the area for an extended period? Your responses can help you determine the compatibility of homeownership with your life objectives.

3. Budget and Affordability:

Establish a comprehensive budget to gauge your comfortable monthly mortgage payment. Keep in mind that homeownership encompasses more than just the mortgage; property taxes, insurance, maintenance, and utilities are additional financial considerations.

Should I buy a house or wait until 2024?

The decision to buy a home ultimately rests with you, as life continues regardless of the perfect timing. If you meet the necessary criteria, are eager to become a homeowner, and maintain financial stability, embarking on a house-hunting journey is a viable option.

However, if you’re hoping for lower mortgage rates, exercising some patience may prove advantageous. Mortgage rates have exhibited recent volatility, surging to over 7 percent in mid-July, subsequently dipping to 6.88 percent, only to climb back up to 7.42 percent by September. This rapid fluctuation represents a 0.54 percent swing in just a matter of months.

When considering a home purchase, it boils down to practical considerations:

Buy Now If:

Interest rates are low, enhancing affordability.
You’ve secured funds for a down payment and related expenses.
Local housing market shows stability or growth.
Purchase aligns with your long-term goals.

Wait If:

Interest rates are high, with expectations of a decrease.
Your financial situation needs improvement (e.g., higher credit score or increased savings).
Local housing market is volatile or prices are declining.
Uncertainty surrounds your long-term plans, making homeownership less logical.