Current:Home > BackMortgage rates are dropping. Is this a good time to buy a house?-InfoLens
Mortgage rates are dropping. Is this a good time to buy a house?
View Date:2024-12-23 14:09:12
Potential homebuyers have spent most of the year sitting on the sidelines because of low inventory and high mortgage rates.
But over the past six weeks, mortgage rates have been steadily dropping, averaging 7% for a 30-year fixed mortgage down from nearly 7.8% at the end of October, according to data released by Freddie Mac on Dec. 7.
Mortgage applications increased 2.8% from the prior week, for the week ending Dec. 1, according to the Mortgage Bankers Association.
So is this a good time to buy a home?
Mortgage rates
Declining mortgage rates may be giving some would-be homebuyers an opportunity to dust off buying plans that were shelved as mortgage rates rocketed higher this fall, says Danielle Hale, senior economist for Realtor.com.
Learn more: Best mortgage lenders
“However, in the big picture, mortgage rates remain pretty high,” says Hale. “The typical mortgage rate according to Freddie Mac data is roughly in line with what we saw in August and early to mid-September, which were then 20 plus year highs.”
Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand, says Sam Khater, chief economist for Freddie Mac.
Most experts, including Hale, expect mortgage rates to trend down in 2024.
Office-to-residential:Can office vacancies give way to more housing? 'It's a step in the right direction'
Housing inventory
Total housing inventory registered at the end of October was 1.15 million units, up 1.8% from September but down 5.7% from one year ago (1.22 million), according to the National Association of Realtors.
Unsold inventory sits at a 3.6-month supply at the current sales pace, up from 3.4 months in September and 3.3 months in October 2022.
“This period between Thanksgiving and the end of the year is typically a very slow homebuying season,” says Lisa Sturtevant, chief economist for Bright MLS. “But as mortgage rates have fallen to their lowest levels since early September, some buyers who have been sidelined by higher rates are jumping back into the market.”
This could be the right time to buy for many buyers, as mortgage rates are down, inventory is rising in many places, and competition likely will be less intense given the time of year, she says.
Waiting for lower rates and more choices could make sense for some buyers, she says. However, those buyers should also expect that prices will continue to rise and competition will also pick up.
Home prices
The median existing-home price for all housing types in October was $391,800, an increase of 3.4% from October 2022 ($378,800). All four U.S. regions registered price increases.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year over year, including a new all-time high for the month of October,” says Lawrence Yun, the chief economist for the National Association of Realtors. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
Daryl Fairweather, the chief economist for Redfin, says in general, 2024 will be more favorable for homebuyers with rates continuing to come down, more new listings hitting the market, and prices falling.
“It's important to note that prices will not fall across the board − in some places they'll rise,” she says. But overall, she expects home prices to fall 1% by the end of 2024.
Fairweather expects prices to fall in parts of coastal Florida, including North Port and Cape Coral because of the surge in home prices during the pandemic and the higher cost of home insurance due to climate disasters. She expects prices to rise in affordable metros such as in Albany and Rochester in New York and Grand Rapids, Michigan.
Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. Follow her on Twitter @SwapnaVenugopal
veryGood! (82)
Related
- Everard Burke Introduce
- Nearly 50 homes in Kalamazoo County were destroyed by heavy storms last week
- California moves closer to requiring new pollutant-warning labels for gas stoves
- Cleveland Guardians latest MLB team to show off new City Connect uniforms
- Rep. Michael McCaul of Texas says he was detained in airport over being ‘disoriented’
- Harry Dunn, former US Capitol police officer, running in competitive Maryland congressional primary
- North Carolina congressional runoff highlights Trump’s influence in GOP politics
- Primaries in Maryland and West Virginia will shape the battle this fall for a Senate majority
- Father sought in Amber Alert killed by officer, daughter unharmed after police chase in Ohio
- Caitlin Clark back in action: How to watch Indiana Fever vs. Connecticut Sun Tuesday
Ranking
- Inspector general finds no fault in Park Police shooting of Virginia man in 2017
- Alabama follows DeSantis' lead in banning lab-grown meat
- Waymo is latest company under investigation for autonomous or partially automated technology
- Florida man who survived Bahamas shark attack shares how he kept his cool: 'I'll be alright'
- Bitcoin has topped $87,000 for a new record high. What to know about crypto’s post-election rally
- The 'most important mentor' ever: Chris Edley, legal and education scholar, has died
- New Mexico forges rule for treatment and reuse of oil-industry fracking water amid protests
- Blinken visits Ukraine to tout US support for Kyiv’s fight against Russia’s advances
Recommendation
-
See Blake Shelton and Gwen Stefani's Winning NFL Outing With Kids Zuma and Apollo
-
Taylor Swift will be featured on Eras Tour opener Gracie Abrams' new album, 'The Secret of Us'
-
Melinda French Gates says she's resigning from the Gates Foundation. Here's what she'll do next.
-
‘Judge Judy’ Sheindlin sues for defamation over National Enquirer, InTouch Weekly stories
-
Watch out, Temu: Amazon Haul, Amazon's new discount store, is coming for the holidays
-
Taylor Swift will be featured on Eras Tour opener Gracie Abrams' new album, 'The Secret of Us'
-
Alabama follows DeSantis' lead in banning lab-grown meat
-
Melinda French Gates to resign from Gates Foundation: 'Not a decision I came to lightly'