First-Time Home Buyer Advice: Fourth Quarter 2024

Q4 2024 Housing Market Trends: What Buyers and Sellers Should Expect

Leaves aren't the only things falling this autumn: Mortgage rates are finally heading down, too. And that, combined with a seasonal dip in home prices, is causing some end-of-year excitement among homebuyers and sellers. The median existing-home price was $416,700 in August — a record high for August, but still down from $422,600 a month earlier. Average rates for the 30-year fixed-rate mortgage have dropped from a high of 7.39% in May to 6.24% in late September.

Q4 2024 Housing Market Trends: What to Expect

The last quarter of the year is usually a slowdown period for real estate markets across the country. Typically, home sales tend to decrease in the fourth quarter and stay subdued until spring. During this period, there are usually fewer buyers, the number of homes for sale declines and properties are more likely to see price cuts compared to other times of the year.

"Many buyers have been waiting on the sidelines to purchase, and many will now purchase quickly. Therefore, we most likely won't see the typical slowdown in the last three months of the year."

— Molly Boesel, Principal Economist, CoreLogic

DiBugnara says falling rates combined with the presidential election should ensure sharp movement in favor of buyers between October and December.

Q4 Mortgage Rate Projections

As of September 25, the rate for a 30-year fixed mortgage averaged 6.24% versus 5.43% for a 15-year fixed home loan. Housing experts envision rates dipping even lower over the rest of the year.

"During the next three months, we're probably going to see average 30-year fixed mortgage rates in the low 6% or perhaps the high 5% range. The path forward for mortgage rates will depend on the state of the economy, the job market, what the Fed does and more."

— Ted Rossman, Senior Industry Analyst, Bankrate

Where Home Prices Are Heading

Housing prices have been on the rise for quite some time, and that doesn't look to change in Q4: Buyers should not expect to see a significant drop in prices before the end of the year.

"Home prices should increase this quarter by 3.9% year-over-year. Continued homebuyer demand bumping up a still-limited supply will push prices up."

— Molly Boesel, Principal Economist, CoreLogic

"You might see slight cooling in certain overvalued markets."

— Dennis Shirshikov, Adjunct Professor of Economics, City University of New York

Housing Inventory Predictions for Q4

"We're unlikely to see a huge wave of homeowners listing their properties for sale until mortgage rates come down significantly — probably below 5.5%. However, inventory levels are up about 40% from last year. The inventory of new homes for sale is actually back to pre-pandemic levels, so overall there's more to buy."

— Rick Sharga, Real Estate Market Expert

"Many homeowners locked into low mortgage rates will continue holding off on selling, restricting supply."

— Dennis Shirshikov, Adjunct Professor of Economics, City University of New York

"As new supply enters the market, it should quickly exit as homebuyers waiting on the sidelines act quickly. For-sale inventory should trend around 15% to 20% above 2023 levels."

— Molly Boesel, Principal Economist, CoreLogic

Strategies for Homebuyers and Sellers

If you're hoping to buy, be sure your finances are in order.

"Don't buy a home before you're ready. Make sure you have a cushion for transaction costs, repairs and maintenance. It's better to rent for longer than to buy before you are ready."

— Ted Rossman, Senior Industry Analyst, Bankrate

"Competition for properties should remain brisk in quarter number four, so buyers should be ready to act when they find the home they want to purchase."

— Molly Boesel, Principal Economist, CoreLogic

"I'd recommend considering less competitive markets where your purchasing power can go further. You might find some good deals, especially from sellers who are more motivated to close before the end of the year."

— Dennis Shirshikov, Adjunct Professor of Economics, City University of New York

Advice for Sellers

Originally published on Bankrate by Erik J. Martin · September 27, 2024.