As we step into 2024, potential homebuyers might see a light at the end of the tunnel due to unique market conditions. According to Thomas Eller, Vice President and Senior Mortgage Loan Officer at Raleigh’s North State Bank, now could be the optimal time for those considering purchasing a home, especially before anticipated changes in mortgage rates.
Mortgage Rates Normalizing
Eller advises potential buyers to stay vigilant for housing opportunities throughout 2024. He predicts that while immediate drops in mortgage rates should not be expected, there is a forecasted decrease to the low sixes by the end of the year according to Freddie Mac and the Mortgage Bankers Association. This anticipated drop could present a golden opportunity for buyers to lock in rates before they fall further, potentially leading to increased competition. Eller suggests that the savvy move is to buy now and consider refinancing later as rates decrease, highlighting the average seven-year lifespan of a loan.
The Rebounding Market
Despite a slow rebound, the Triangle MLS data indicates a tight market, with a continued low supply of homes. This situation underscores a pressing need for more listings to accommodate the growing number of new residents. Eller believes securing a property now and refinancing later remains a prudent investment compared to waiting for more favorable conditions that might not materialize as expected.
Incentives for Early Buyers
2024 presents various incentives for early homebuyers, particularly from builders and sellers eager to close deals. Eller points out the advantages of current market concessions, such as a two-year buydown on mortgage rates, which could significantly benefit buyers planning to refinance within a couple of years. These incentives are designed to offset the higher rates initially paid by the buyers, providing a cushion and making the initial purchase more appealing despite the higher interest rates.
Making Informed Decisions
It’s crucial for buyers to understand that mortgage rates might not return to the historic lows seen in recent years. However, rates in the high fives or low sixes are still considerably lower than the historical average. Eller emphasizes the importance of weighing the current incentives against future rate reductions, suggesting that waiting for a slight rate decrease might not outweigh the benefits available now, especially as house prices continue to rise.
Financial Considerations
Eller advises buyers to focus on what monthly payment they can afford rather than fixating on the fluctuating rates. He points out that the significant investment of purchasing a home should be approached with a clear understanding of one’s financial limits and the available assistance programs, such as down payment help for first-time buyers. The current incentives can provide more flexibility in monthly payments, making homeownership more accessible.
As 2024 unfolds, the advice from experts like Thomas Eller suggests that potential buyers should consider entering the market sooner rather than later to make the most of the unique circumstances. With mortgage rates expected to normalize and valuable incentives on the table, this year could be an opportune time for many to achieve their homeownership dreams.
