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Hope for Homebuyers in 2024: Relief from Shortage and High Interest Rates?

Homebuyers have been facing challenges in the form of a shortage of homes for sale and higher interest rates over the past year. However, there could be some relief in 2024 as the market starts to shift.

First-Time Buyers Returning to the Market

Greater Lehigh Valley Realtors President Howard Schaeffer mentioned that first-time buyers have been tiptoeing back into the market this year, with less competition and fewer multiple-offer scenarios. While the share of first-time buyers is still near historic lows, it is higher than last year, and these buyers have higher household incomes and are more likely to use financial assets to enter the market.

Current Market Conditions: Low Inventory and High Prices

Statistics from October showed that purchase activity was still down compared to the same period last year, mainly due to high interest rates. This has caused many current homeowners to hold off on selling, resulting in historically low inventory levels nationwide. Consequently, median sales prices have increased, making it even more challenging for buyers to find a home to purchase.

Interest Rates Expected to Decrease in 2024

National Association of Realtors Chief Economist Lawrence Yun predicts that interest rates may have already reached their peak and will drop to between 6% and 7% by the spring of 2024. This decrease in interest rates could encourage more sellers to enter the market, helping to alleviate some of the current inventory issues.

Home Builders Striving to Meet Demand

Home builders have been working to keep up with demand, which could also help with supply and demand issues. Yun mentioned that builders are back on their feet, with newly constructed home sales up 5% year to date. In a housing shortage environment, builders can create inventory and benefit from the current market conditions.

Existing Home Sales Expected to Rise Next Year

As pent-up sellers start to list their homes and new home sales continue to perform well, existing home sales are expected to rise by 15% next year. While household income is also on the rise, it will still be a challenging climb for many who want to buy a home.

With the potential for relief in 2024, homebuyers can remain hopeful for a more balanced market in the coming years. However, it is essential to stay informed about market conditions and trends to make the best decision when purchasing a home. For expert advice and assistance in finding your dream home, consider working with a professional real estate agent, such as those at Jessica Fulk Real Estate.

Orginal article: Link To Article – provided by Kansas City Realtors