Should you buy a house in 2024?
Is 2024 a good time to purchase a new home? On this episode of A Wiser Retirement™, Casey Smith is joined by realtor, Tom Townsend from Townsend Realty Group. They talk about what’s going on in the housing market, what to know about buying a house in 2024, interest rates, upcoming changes to realtor commissions, and investing in a second home.
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Summary
Upcoming Changes to Realtor Commissions
There was a recent lawsuit against the National Association of Realtors alleging a lack of transparency in realtor commission definitions and payments. The lawsuit highlighted that while commission fees are negotiable in some states, there’s confusion and inconsistency in others. A settlement was made and beginning in July 2024, the “compensation for real estate brokers cannot be listed on multiple listing services and that buyer-side real estate agents have to enter into written agreements with their buyers. There has been a lot of speculation about how this change will work in practice.” (Source)
Is it a buyers or sellers market?
With high interest rates, it is still a seller’s market. There is a lack of inventory due to the high interest rates. If rates were to drop significantly, there would likely be a surge in demand for homes, leading to increased house prices and a worsening affordability crisis. This affordability issue is already a concern, with the average homebuyer in the Atlanta area paying 41% of their income towards their mortgage. To buy an average-priced house with a 20% down payment and a 30-year fixed mortgage, a household income of around $200,000 is required to maintain the recommended 25% income-to-mortgage payment ratio. Tom predicts that rates will hold steady and values will continue to increase, potentially reaching 5% to 6% this year.
Should you buy a house in 2024?
For buyers, you want to find a great agent and be prepared to compete in the sellers’ market. For sellers, start by making your house look presentable and competitive, as buyers are being more selective. One struggle in the current real estate market is finding accurate comparables for appraisals due to the lack of sales in the resale market. New construction is where most of the inventory currently is, and there are often incentives offered by builders.
Links:
- Tom Townsend, Townsend Realty Group
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