As the year winds down, homebuyers are navigating a dynamic housing market influenced by shifting mortgage rates, inventory trends, and economic conditions. Here’s an overview of what you should consider if you’re planning to buy a home this December.
Mortgage Rates
Following the Federal Reserve’s rate cuts in September and November, mortgage rates have declined modestly but remain above 6%. While the Fed’s December meeting could bring additional rate cuts, inflation concerns may limit significant reductions. Mortgage rates are expected to hover between 6.875% and 7.125% through the end of 2024. If you’re considering buying, locking in a rate now could save you money, with the option to refinance later if rates drop further.
Home Prices
Nationally, home prices have seen slow growth, with a year-over-year increase of 3.4% in October 2024. The Northeast, particularly New Jersey, Rhode Island, and New Hampshire, has outperformed other regions with notable price gains. Despite these pockets of growth, the overall market remains stable, with modest price increases expected in 2025.
Inventory and Market Trends
Inventory levels are improving, offering more choices for buyers, but popular neighborhoods still see competition and multiple offers. While the market isn’t as hot as in previous years, it has not transitioned into a full buyer’s market. A measured rebound is anticipated in 2024 following the slower activity of 2023.
Credit Score and Financial Preparation
Your credit score remains critical in determining the interest rate you qualify for. A higher score can lead to significant savings over the life of a loan. You’re entitled to one free credit report annually from each of the three major credit bureaus—Equifax, Experian, and TransUnion. Use these reports to address any issues and position yourself for better loan terms.
Home Features and Preferences
When searching for a home, consider features that align with long-term value and lifestyle preferences. For example, a separate laundry room remains one of the most sought-after amenities for buyers.
Key Insights for December 2024
- Refinancing Opportunity: If you secure a mortgage at today’s rates, you can refinance later as rates decrease. This strategy allows you to build equity sooner while potentially reducing long-term costs.
- Impact of Economic Shifts: Unemployment and inflation trends could influence mortgage rates. Pay attention to economic indicators to gauge when rates might shift.
- Price Risks with Rate Drops: Lower mortgage rates often increase demand, potentially driving prices higher. Acting sooner may help you avoid higher competition and rising costs.
Moving Forward
The housing market in December 2024 offers opportunities for well-prepared buyers. By staying informed and financially ready, you can navigate the current environment with confidence. If you’re ready to make your move, let’s discuss how I can help you find the perfect home while ensuring your financial goals align with market conditions.
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Call or Text Steve Schappert 203-994-3950