State of the Mortgage Market: Spring 2024

It’s not a secret springtime is prime home-buying time. The state of the mortgage market fluctuates all year but as we move further into 2024, the market’s current conditions provide unique opportunities for those looking to buy a home.

2024 Market Conditions

The start of the spring homebuying season saw interest rates for a 30-year term in the mid-6’s. These rates may seem high compared to the ultra-lows we saw in 2020-2021 but are still relatively low when you look at overall historical rates. Interest rates are expected to drop as the market loosens up with more inventory on the market.

Currently, we’re in a unique market where home prices are more of the barrier to potential homebuyers than the interest rates.

Much of 2023 was a seller’s market, meaning sellers had the advantage in the transaction. This was due to there being more buyers than sellers in the market. Now that we’re into 2024, determining whether you’re shopping in a seller’s market or a buyer’s market can depend on the price range you are shopping in.

• For price ranges up to $400,000, you may still be in a seller’s market, and you’ll have to be competitive with your offer. Many first-time homebuyers may find themselves in a multiple-offer situation. Work with your realtor to be creative with your offer. This may include offering at or above asking price, waiving inspections and offering flexible close dates for the sellers. Just be sure you understand the pros and cons of your offer by discussing with your realtor and lender.
• For price ranges above $400,000, the market is trending more in the buyer’s favor. In a buyer’s market, typically sellers will drop their asking prices to gain an advantage. Competition has relaxed and you are more likely to be able to negotiate or take advantage of incentives offered by the seller.
• If you’re looking at building a new home, builders are not dropping prices, but they are offering more incentives than ever such as builder upgrades or buydowns, which is a way for a you to obtain a lower interest rate by the builder paying discount points at closing.
  
  

How To Be the Most Qualified Buyer

Apply for Pre-Qualification or Pre-Approval

In this competitive landscape, it’s important to understand the difference between getting pre-qualified and pre-approved. A prequalified buyer submits a credit application to the lender who then runs their application through an automated underwriting system to get the initial approval. A pre-approval takes that step further and requires the buyer submit credit, income and asset documentation for review by an underwriter. A pre-approval indicates to the sellers that you are a committed homebuyer and that you have gone through every possible step in the process before going under contract. Taking this extra step can give you a leg up on your offer.

Do Your Research

Make a list of your must-haves you want in a home to help narrow down your home search options. Hiring an experienced realtor that understands the local market and has great negotiation skills can give you an edge over the competition.

Optimize Your Credit Worthiness

The higher your credit score, the more mortgage loan options you have available to you. Plus, you’ll also qualify for a lower interest rate which will save you money on interest costs over the life of the loan. There are things you can do to boost your credit score: make your payments in full and on time, only use up to 30% of the credit on your revolving accounts like credit cards and don’t open new credit unless absolutely needed.

Seek Professional Guidance

At CommunityAmerica, our team of Mortgage Advisors are local, so we always have a pulse on the local housing market trends. Whether you’re looking for your first home, your next dream home or even to refinance your current home, your Mortgage Advisor is here to help every step of the way.

If you have questions about your mortgage options, interest rates or the best way to get started, give our Mortgage Advisors a call at 913.905.3799 or schedule an appointment online.

All loans subject to approval.