Navigating the Housing Market in 2024

The housing market in 2024 can be frustrating for those looking to buy a home, as soaring prices are colliding with high interest rates. As of March 2024, the average home price in the United States stands at $534,000, reflecting a 6.6% increase from 2023.

This continued surge in home prices, along with the recent reluctance of many homeowners to sell, highlights the dynamic nature of the current real estate landscape. Let’s take a closer look at how to make sense of the 2024 housing market and important factors to consider in order to determine whether purchasing a home is right for you.

Interest Rates Matter

One of the key drivers, if not the driver, of the residential real estate market is mortgage rates. Currently, the national average for a 30-year fixed-rate mortgage is approximately 7%, which is a dramatic increase from the 2.65% rates offered in 2021. Higher rates reduce affordability and increase the risk to new owners. Therefore, the recent upward move in rates has made the decision surrounding homeownership much more complicated.

When to Buy: 

The factors mentioned above prompt the question: When is the optimal time to take the plunge into homeownership? While every individual case is different, certain factors can be helpful to consider when making the decision to buy a home:

Do You Need a House? 

The first step is to align your purchase with a specific need. Whether driven by a growing family, relocation, or investment objectives, clarifying your purpose can anchor your decision-making process amidst market fluctuations.

Is Your Job Secure? 

Next, evaluate your job security. Although absolute certainty is impossible, it is important to assess your job status, especially if you are considering taking on mortgage debt. You do not want to become a forced seller because of a job loss.  

Will Your Mortgage Payment Be Less Than 25% of Net Income? 

There is a common belief that Americans only care about the carrying cost of a home i.e., the monthly payment. While this may not always be the case, my personal experience suggests that it does often hold true. Keeping your mortgage payments, including property tax and insurance, under 25% of your net income may help improve your financial resilience and reduce the risk of housing-related stressors.

Will You Need to Move? 

Carefully assess your future plans before making the decision to buy a home. While the current job market provides more opportunities for remote work, many professions still require employees to work on-site. If you think you might need to relocate for work within the next 3-5 years, it may be best to avoid buying a home. Renting could give you the flexibility you need and help prevent you from having to sell your property in an unfavorable market.

In conclusion, navigating the 2024 housing market requires a thoughtful and nuanced approach that takes into account both the dynamic market and your individual circumstances. Pay close attention to the indicators and align your decisions with your specific needs, financial stability, and long-term goals.



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certified financial planner Marshall Clay wears a gray jacket and white shirt while posing for professional photo in office

Marshall Clay CFP, J.D., is a Partner and Senior Advisor at The Welch Group, LLC, specializing in providing Fee-Only investment management and financial advice to families throughout the United States. Marshall is a graduate of the United States Military Academy in West Point, New York, the Cumberland School of Law in Birmingham, Alabama, and is a CERTIFIED FINANCIAL PLANNER™.  In addition, Marshall is a frequent guest on local television stations as an expert on various financial planning matters.



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