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If you’re thinking about buying or selling a house right now and wondering about the real estate housing market, you’re not alone. The housing market has seen a lot of unusual trends in the past couple of years, so it makes sense you’d want the latest market update before you decide to buy or sell. The truth is, housing market predictions are about as reliable as weather forecasts. The real estate pros make their best predictions based on data, but no one can know what’s going to happen with 100% accuracy.

Still, even if you don’t know for sure, you can check out what the experts are saying and make some pretty good guesses. Just remember, you never want to let a market prediction control your housing decisions . . . only your personal situation and finances should do that!

With that said, here’s the real estate market forecast.

 

Will Mortgage Rates Go Down in 2024?

Mortgage interest rates have been rising like crazy over the last few years, thanks to the Federal Reserve (also known as the Fed) repeatedly raising the federal funds rate. But will that trend finally start heading in the other direction in 2024? Yep! In fact, it already has.

Average interest rates across the U.S. for both 30-year and 15-year fixed-rate mortgages began steadily going down in November 2023, and that trend continued into January 2024.1 Rates will likely keep going down throughout the rest of the year, especially since the Fed projected that it’ll lower the federal funds rate three times in 2024.2

So, what does that mean for the housing market? First, it means that buyer demand could increase in 2024 since more people will be able to afford a mortgage. It also means that, if you’re financially ready to buy a house, there’s no reason to wait around—since an increase in demand would also lead to an increase in home prices.

How do you know if you’re financially ready to buy? Let’s take a look.

Should I Buy a House in 2024?

You’re ready to buy a house in 2024 if (and only if) you can check off these boxes:

You’re debt-free.
You have an emergency fund of 3–6 months of expenses.
Your monthly house payment will be 25% or less of your monthly take-home pay on a 15-year fixed-rate mortgage.
You have a down payment. A 20% down payment is ideal because you’ll avoid paying private mortgage insurance (PMI). But 5–10% is okay, too, if you’re a first-time home buyer. Just be prepared to pay PMI. And steer clear of FHA and VA loans—you’ll pay much more in fees with them.
You can pay the closing costs up front without stealing from your down payment.

If you don’t meet these qualifications, it doesn’t matter if the market is in your favor. Buying a home would end up being a curse instead of a blessing. Take your time to get in a better financial position so you can buy a house the right way.

 

Housing Market Recession: What Is It and Are We in One?

A housing market recession means the total number of home sales has been shrinking for at least six months in a row. So, has that been happening? Nope! In fact, home sales actually grew from May to June 2023, and again from July to August.3 That means the housing market is steady, even though sales saw a seasonal decline toward the end of the year.

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But even if home sales become unstable and start decreasing consistently in 2024, a housing recession isn’t really something to worry about—the prices will stay about the same.

You’d only worry about the market if the declining home sales were indicating too much supply (houses for sale) and not enough buyer demand. That would make home values plummet and hurt the overall economy. But that’s not what’s happening!

Forecast: Will the Housing Market Crash in 2024?

If you’re concerned about the housing market potentially crashing in 2024, you can put those worries to rest. Not only will prices not drop substantially in 2024, but prices are actually more likely to continue rising. The National Association of Realtors predicts that when August 2024 rolls around, existing home prices will be 2.6% higher than the year before.4 Freddie Mac expects a 0.8% bump during the same timeframe.5

To get a clearer picture of what to expect from the housing market in 2024, let’s go over the three factors that influence prices the most: inventory, buyer demand and interest rates.

What’s the Average House Price in 2024?

The average home price in the U.S. was $736,388 in December 2023 (including existing homes, new builds, single-family homes, condos and townhomes). But most experts report on the median, which was $410,000 in December 2023.6

 

Just so you know, the median price is right smack-dab in the middle of lowest to highest prices. It’s usually better to look at the median home price than the average. That’s because a small group of abnormally high- or low-priced houses can throw off the average and make regular homes seem more or less expensive than they really are. (Just something to keep in mind as you watch the average house price fluctuate in 2024.)

The main thing to know about this (and any) market is that home prices are determined by inventory and demand. Here’s a look at what you can expect in each of those areas.

Housing Inventory

Housing inventory simply refers to the number of houses for sale. When fewer houses are available, buyers are willing to pay more, and sellers have more leverage to increase their asking price. So, low inventory leads to higher home prices. It’s a big reason why buying a home has gotten so expensive recently.

When it comes to housing inventory for 2024, it looks like the number of houses on the market will still be low. For reference: The total housing inventory in December 2023 was 4.9% higher than the year before, but it was 4.7% lower than November 2023 and still a whopping 36% lower than pre-COVID levels.7 

And even though plenty of new houses are being built, it’s not happening fast enough to make a major difference in overall housing inventory. In fact, the number permits issued for new builds was down 11.7% year-to-date in November 2023.8

Buyer Demand

Like we talked about earlier, buyer demand could sink in 2024, especially if the Federal Reserve continues to increase federal interest rates. Today, buyer demand is still greater than housing supply. So home prices are likely to stay mostly the same in 2024, with some markets experiencing a small increase or a small decrease in dollar amount.

Is Now a Good Time to Buy a House?

Here’s the thing: The market shouldn’t determine your decision to buy a house. If you’re prepared financially like we talked about earlier, then it’s a good time to buy a home—even if inventory is limited and interest rates are high. If you’re not financially prepared, it’s not a good time, even if there’s plenty of inventory and rates are down.

What the 2024 Housing Market Means for Buyers and Sellers

Is It a Buyer’s Market?

In a buyer’s market, there are more homes for sale than buyers. But since home supply is still low, it doesn’t look like there’ll be a buyer’s market anytime soon.

The good news is, the market isn’t as hot as it was in the past few years. If you’re looking to buy, you’ll have a few more options—and maybe less competition. Yes, prices are still high, but the frenzy is slowing down.

Is It a Seller’s Market?

A seller’s market is when demand for homes is higher than the supply of homes. And that’s still the case right now. If you’re planning to sell your house, you can expect to sell it fairly quickly for close to your asking price—as long as your asking price is realistic for the current market. (It’s easy to value your home based on memories and how much you loved living there, but a good agent will help you price it fairly.)

Will There Be a Lot of Foreclosures in 2024?

Foreclosures will likely rise throughout 2024, just as they did in 2023. For reference, the number of foreclosures in 2023 was 10% higher than the year before.9

Now, if you’re concerned about a repeat of the crazy number of foreclosures we saw back in 2010 on the heels of the Great Recession, here’s a stat that should give you some peace of mind: While foreclosure repossessions were up 10% in 2023 compared to 2022—that was still down 28% compared to 2019, and down 88% compared to the peak of foreclosures in 2010 caused by the Great Recession.10 

Plus, most of the homes in foreclosure today probably won’t be repossessed by lenders like they were during the Great Recession. That’s because many of the borrowers in foreclosure today have positive equity (their homes are worth more than they owe), which they can use to avoid foreclosure by selling their house.11

Here’s what all this foreclosure stuff means for homeowners and home buyers:

Homeowners: Since the market isn’t going to get flooded with foreclosures, you can rest easy, knowing your home isn’t going to tank in value because of a sudden increase in home inventory.

Home buyers: If you’re waiting to find a great deal on a foreclosure, don’t hold your breath. This market is nothing like the Great Recession. And keep in mind, buying a foreclosed home could come with its own set of potential issues. So, make sure you do your homework on the house and know what you’re getting yourself into before you buy.

How to Buy or Sell With Confidence in Any Housing Market

I know buying or selling a house may seem overwhelming, especially after all the wackiness we’ve seen in the market over the last few years, but you’ve got this!

Yes, the cost of buying a house is higher than it’s ever been before. And yes, selling a home in 2024 will come with obstacles—like higher-than-normal interest rates and high home values pricing out a lot of would-be buyers. But just because buying or selling may be more difficult now than it was a couple of years back, it is not impossible.

You still control your financial future. That includes real estate—no matter what’s going on in the market.



This article was originally published by a www.ramseysolutions.com . Read the Original article here. .


HOUSTON – A massive settlement that changes the way homes are bought and sold goes into effect August 17. In the spring, the National Association of Realtors agreed to a $418 million settlement and rule changes to answer a class-action suit alleging a fee conspiracy to inflate broker commissions. 

The settlement is supposed to make home buying more transparent, but adds another complication to an already-tight housing market.

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Houston real estate agent Tricia Turner says tight inventory, high prices, and inflated interest rates are already making home sales a tough-sell for many, “50% of all real estate agents have not sold a single home this year. Not one single home. So, they are already struggling.”

The Houston Association of Realtors reports June sales were down more than 11%, over a year ago. Now, the new settlement rules will add work and costs to would-be buyers.

Before the agreement, when a house went on the market, the seller typically paid the cost of all of the agents involved. It was usually about 6%; 3% for each side, and that information was stipulated on the listing. Specifically, it stipulated how much the buyers agent would receive for finding someone to buy the home. 

That’s what’s changing. 

Now, if you want to buy a home, you’ll have to find your own agent or broker, negotiate how much money they will earn, and sign an agreement every time you come to look at a house.

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It will all mean a lot of extra work just to view a potential purchase, as brokers will have to justify what they earn for what they do. All of it is designed to give buyers and sellers flexibility over what they pay. 

“If you’re a buyers agent, you’re going to want something rather than nothing, so you’re going to have to make the deal work,” says Turner. “(But) those buyers agreements can be amended.  So, just because a buyers agent says, ‘I want you to pay me 2%,’ and the buyer agrees, those can be amended and changed.”

The net-effect is that sellers will generally make a little more money on the sale of their home. Buyers, meantime, will often have to pay for a professional service that was previously rolled-into the deal. Consequently, they’ll want to find someone who knows what they’re doing. That’s where research and recommendations will be vital.



This article was originally published by a www.fox26houston.com . Read the Original article here. .


A lack of affordability and buyer hesitation stemming from elevated interest rates and high home prices contributed to a decline in builder sentiment in August.

Builder confidence in the market for newly built single-family homes was 39 in August, down two points from a downwardly revised reading of 41 in July, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the lowest reading since December 2023.

Almost three-quarters of the responses to the August HMI were collected during the first week of the month when interest rates averaged 6.73%, according to Freddie Mac. Mortgage rates declined notably the following week to 6.47%, the lowest reading since May 2023.

Challenging housing affordability conditions remain the top concern for prospective home buyers in the current reading of the HMI, as both present sales and traffic readings showed weakness. However, with current inflation data pointing to interest rate cuts from the Federal Reserve and mortgage rates down markedly in the second week of August, buyer interest and builder sentiment should improve in the months ahead.

The August HMI survey also revealed that 33% of builders cut home prices to bolster sales in August, above the July rate of 31% and the highest share in all of 2024. However, the average price reduction in August held steady at 6% for the 14th straight month. Meanwhile, the use of sales incentives increased to 64% in August from 61% in July, and this was the highest level since April 2019.

Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index charting current sales conditions in August fell two points to 44 and the gauge charting traffic of prospective buyers also declined by two points to 25. The component measuring sales expectations in the next six months increased one point to 49.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell four points to 52, the Midwest dropped four points to 39, the South decreased two points to 42 and the West held steady at 37. The HMI tables can be found at nahb.org/hmi.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .


FluxFactory/GettyImages; Illustration by Hunter Newton/Bankrate

Key takeaways

Deciding whether to sell your house or rent it out depends on personal circumstances, such as immediate cash needs and future housing plans.

Selling might be the better option if you need the proceeds to pay for your next home or stand to make a large profit.

Renting it out could be a good choice if you’re looking for additional income or if you’re moving temporarily and plan to come back.

There are many reasons why a homeowner might want to move. But whatever your reason, one question still applies: What should you do with your current home? Depending on your financial situation and your local housing market, you might consider renting it out rather than selling. If you’re caught in the sell versus rent debate, here are some factors to consider, including the costs.

Should I sell or rent my house?

A home is the biggest financial asset most people own, and deciding what to do with it shouldn’t be taken lightly. There are pros and cons to both options: For example, selling gets you a large windfall of cash all at once, while renting earns you smaller increments of steady monthly income from your tenants. If you have somewhere else to live and can afford to hang on to the house, renting it will also allow you to continue building equity as home values go up. Take a look at the following scenarios to determine which path is best for you.

When selling your home is a good choice
If you need the cash to pay for your next house

If your ability to buy a new home relies on accessing the money tied up in the current one, then selling is the best option. That way, you can take all your proceeds from the sale and put it toward your new down payment. Buying a new home while selling your current one can be a tricky balancing act, so be sure to work with an experienced real estate agent who can guide you through the process.

If you have no interest in being a landlord

Managing a rental property is time-consuming and often challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord or paying for a third party to take care of things instead.

If you stand to make a significant profit

Property values have risen all over the country over the past few years, and home prices remain high. Depending on how long you’ve owned your home, how much you paid for it and how hot your local market is, selling could net you a significant windfall. Take a look at nearby real estate comps to see how much homes similar to yours have been selling for.

If you are eligible for capital gains tax exemptions

If you do sell your home for a profit, you may be able to exclude up to $250,000 of capital gains from the sale (or up to $500,000 for married couples filing jointly) from your taxes. For this to apply, the home must have been your primary residence for at least two out of the last five years, among other criteria.

When renting your home is a good choice
If your move is temporary

If your move is short-term and you plan on returning to your current city in the future, you may want to keep your home and rent it out in the meantime. Knowing there will be a place for you to live when you return provides peace of mind — and when you factor in closing costs, it may even cost less than selling and purchasing another home at a later date.

If you want the rental income

Extra income can be hard to turn down! But if you decide to rent your current home and want to buy another one with a mortgage, keep in mind that lenders will consider rental income when determining your financing. In some cases, a lender will only allow a portion of your rental income to be counted as an income source. In addition, you will be carrying two mortgages at once, so make sure this is something you are financially able to take on.

If rental demand in your area is high

Is your home in a hot neighborhood with lots of buzz? Is it in an extremely desirable school district, near a vacation destination like a beach, or close to the best amenities in town? Evaluate the rental demand in your area — renting is much less stressful when finding a tenant is fast and easy. Research the local housing market to determine what other similar properties are charging in rent. You can also speak to a local agent or property management company to learn more about the rental demand in your neighborhood.

If you expect home values to rise in your area

It’s impossible to foresee with 100 percent accuracy where the housing market is headed. That being said, you may be able to make an informed prediction. If you expect that your current home’s value will increase within a few years or less, you might want to consider renting it out now and selling later, to take advantage of the price appreciation.

Selling vs. renting your home: Costs to consider

Both renting and selling a home will incur costs. One of the most important things to think about is whether the rental income you’d receive will be enough to cover the property’s mortgage and upkeep.

To determine how much rental income you can reasonably expect to earn, take a look at what other similar properties are charging and weigh that against the costs of owning and maintaining the property. From there, you can gauge whether you’ll be able to recoup your expenses, and maybe even turn a profit.

Costs of renting out a home

Mortgage: Even though you’ll be earning rental income, you’re still responsible for paying the mortgage, which may or may not be fully covered by the rent you bring in. The same goes for property taxes.

Insurance: Landlord insurance can cover certain costs, such as damage to the home or someone getting injured on the property. You can expect this to cost roughly 25 percent more than the typical homeowners insurance policy — which you’ll also still have to pay for.

Maintenance and repairs: You’ll need to keep up with routine maintenance to ensure the home is fit for tenants. As a rule of thumb, budget at least 1 percent of the home’s value every year (more if it’s an older property) to pay for maintenance.

Finding a tenant: To find a tenant, you’ll have to get the word out. Consider any marketing costs you may incur, such as taking out an advertisement. You may also need to pay for background and credit checks of potential renters — though you might be able to pass this nominal expense on to the tenant.

Vacancies: Consider, too, the cost of vacancies between tenants. If a tenant moves out and you don’t have a replacement, that’s income you’re losing out on.

Property management fees: Hiring a property manager makes being a landlord less onerous, but it will eat into your profits as well. These companies tend to charge a percentage of the rent price, typically around 10 percent.

HOA fees: If your home belongs to a homeowners association, you’ll also be responsible for HOA fees, which vary considerably depending on what type of amenities are offered.

Costs of selling a home

Agent commissions: For ages, the typical real estate commission has been between 5 and 6 percent of a home’s sale price, split evenly between the seller’s agent and the buyer’s agent and paid entirely by the seller. That is about to change, however, as a result of a legal battle recently settled by the National Association of Realtors. Beginning this summer, depending on the deal, buyers may be responsible for paying their agent’s commission directly. That said, a single agent’s fee is still a significant expense: On a $400,000 sale, for example, 2.5 percent comes to $10,000.

Home improvements: To get your home in shape to sell, you’ll likely have a few services to pay for. These might include sprucing up the landscaping, a thorough deep cleaning and making any necessary repairs. And paying a pro to stage your home can increase its desirability, potentially bringing in a higher price.

Closing costs: Sellers typically incur some closing costs beyond Realtor commissions, too, such as attorney fees, transfer taxes and title insurance.

Mortgage payoff: If you still have a mortgage on the home, once you’ve sold it, some of the proceeds will go toward paying off the remainder of your loan.

What if there’s a recession?

Some economists still predict a recession in the country’s near future. According to Bankrate’s most recent Economic Indicator Poll, the odds of a recession over the next 12 months are 33 percent. Before you make a final decision on whether to sell your house or rent it out, ask yourself how a serious economic downturn might affect your finances. Is your job stable? Is your savings strong? Would you still be able to manage two mortgages during a recession, or the possibility of less rental income than expected? If the answer to any of these questions is no, selling may be the safer option.

Bottom line

The question “should I sell or rent my house?” requires careful consideration of your financial situation, lifestyle and local housing market. To help guide your decision, consider the costs of both options, whether you’ll return to your current location anytime soon and if you’re interested in being a landlord.



This article was originally published by a www.bankrate.com . Read the Original article here. .


In July, job growth decelerated significantly, and the unemployment rate increased to a nearly three-year high of 4.3%. The July data indicates that the labor market is slowing, which signals monetary policy easing in the months ahead.

Additionally, wage growth slowed for the second month in a row. In July, wages grew at a 3.6% year-over-year (YOY) growth rate, down 1.0 percentage point from a year ago. This marks the lowest YOY wage gain in the past four years.

Total nonfarm payroll employment increased by 114,000 in July, following a downwardly revised increase of 179,000 jobs in June, as reported in the Employment Situation Summary. The estimates for the previous two months were revised down. The monthly change in total nonfarm payroll employment for May was revised down by 2,000, from +218,000 to +216,000, while the change for June was revised down by 27,000 from +206,000 to +179,000. Combined, the revisions were 29,000 lower than the original estimates.

Despite restrictive monetary policy, nearly 7.8 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In the first seven months of 2024, 1,419,000 jobs were created. Additionally, monthly employment growth averaged 203,000 per month, compared with the 251,000 monthly average gain for 2023.

In July, the unemployment rate rose for the fourth straight month to 4.3%, the highest rate since October 2021. The number of unemployed persons rose by 352,000, while the number of employed persons was barely changed.

Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, rose 1.0 percentage point to 62.7% for July. Moreover, the labor force participation rate for people aged between 25 and 54 ticked up to 84.0%, the highest level since March 2001. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people aged between 25 and 54 exceeds the pre-pandemic level of 83.1%.

For industry sectors, health care (+55,000), construction (+25,000), and transportation and warehousing (+14,000) have notable job gains in July, while information employment lost 20,000 jobs.

Employment in the overall construction sector increased by 25,000 in July, after 20,000 gains in June. While residential construction gained 9,100 jobs, non-residential construction employment added 16,200 jobs for the month.

Residential construction employment now stands at 3.4 million in July, broken down as 950,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,067 a month. Over the last 12 months, home builders and remodelers added 67,600 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,387,400 positions.

In July, the unemployment rate for construction workers rose to 4.4% on a seasonally adjusted basis. The unemployment rate for construction workers remained at a relatively lower level, after reaching 15.3% in April 2020, due to the housing demand impact of the COVID-19 pandemic.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .

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