GREENSBORO, N.C. — Real estate agents and their hopeful buyers and sellers sure hope 2024 "rings" in a fresh start for the housing market.
In October, mortgage rates hit 8% for a 30-year loan. Despite that, prices remained high, a product of low supply. Economists predict the new year will bring good news with lower rates but bad news with continued tight inventory.
Financial literacy author and Debt Sucks University founder Ja'Net Adams emphasizes the value of waiting for the right moment to buy or sell.
"Buying a house will always be a hot topic, but over the last year, it has been scorching hot and all people want to talk about. Potential homebuyers are becoming impatient," Adams admitted.
Look (only) to Jerome Powell
Many economists believe the Federal Reserve is finished with rate hikes and could start cutting its benchmark rate because of cooling inflation, but Adams warned buyers and sellers the market is not "out of the woods."
"All of these talking heads are saying that interest rates are going to be cut soon by the Federal Reserve, but none of their names are Jerome Powell (the Federal Reserve chairman). Jerome Powell has said the Federal Reserve will not be cutting any rates until they see 2% inflation, and inflation currently is at 3%. So, as a homebuyer, don't expect a decrease in mortgage rates until Powell and the Federal Reserve are satisfied with the downward direction of inflation," she said.
Watch for a break on prices
She suggested buyers seek unique opportunities to jump on deals, before they turn into bidding wars.
"Depending on where you live in the country, you could start to see some decrease in home prices. You should look for homes that have been sitting on the market for a while, because maybe you can offer that homeowner a lower price. Also, keep an eye out for foreclosures, because that can also bring you a home lower in price," she explained.
Every situation is different
It is important to understand, however, 2024 trends will vary by region and state.
"As a homebuyer, your situation is going to be different from someone else's. You may live in a state with reasonable or below-market home prices, so it may be OK for you to buy with a 7% interest rate. It may be best for you to save a 20% down payment while waiting for rates to go down, so when it is time to buy, you are bringing more money to the table," she said.
She emphasized the market cannot be forced to cooperate.
"You just need to be prepared for when the opportunity comes," she concluded.