Is It A Good Time To Buy A House [June 2024]

June 2024 is a good time to buy a house. This unbiased article discusses why. It examines current mortgage rates, recent home values, and market sentiment to highlight why renters are likely better off buying a home than renting another year.

The main reasons to buy instead of rent are:

1. Today’s mortgage rates are no longer jumping higher
2. There’s a timely (and maybe temporary) increase in homes for sale
3. Home sellers are showing small amounts of fear

The article also touches on first-time home buyer grants and programs, such as the FHFA First-Time Home Buyer Mortgage Rate Discount, which helps with home affordability.

---

Mortgage Rates Are On Their Way Down

According to Freddie Mac, the average conventional 30-year fixed-rate mortgage rate nationwide was 7.22% at the beginning of last month.

Today, November 17, 2024, mortgage rates average 0.06375, which is a sizeable drop.

Key drivers behind this month’s mortgage rate improvement include:

• Inflation rates resuming their downward trajectory
• The Federal Reserve offering clear monetary policy guidance
• The mortgage-backed securities market taking on more risk

As rates drop, by the way, some home buyers are getting lower rates than others.

Eligible first-time buyers still receive the automatic interest rate reduction afforded by the FHFA First-Time Home Buyer Mortgage Rate Discount, which lowers rates by as much as 1.75 percentage points. The temporary government discount program applies to all conventional mortgage types, including three-percent down mortgages such as HomeReady, Home Possible, and the Conventional 97.

FHA-backed home buyers are getting discounts, too.

In 2023, the Federal Housing Administration reduced mortgage insurance premiums on all new FHA loans for the first time since the mid-2010s. The move lowered monthly payments by $300 per year per $100,000 borrowed and boosted home affordability.

And now, Freddie Mac is offering a $2,500 closing cost grant to very-low income home buyers, which also reduces the cost to buy a home.

---

Average 30-Year Fixed-Rate Mortgage Rates

Homebuyer.com uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.
Data: Freddie Mac. Do not reprint without permission.

Home Sales Are Temporarily Moving Into Balance

The most recent Existing Home Sales report from the National Association of REALTORS® showed more homes for sale and a slowing sales pace in April.

Real-time data from Altos Research shows the trend continues into June.

• There are 39% more homes for sale this month as compared to June 2023
• 35.1% of home sellers have reduced their original sales price, up from 30%
• Less than 20% of homes are selling in the first seven days

Still, there is less than a 6-month national supply of homes, which suggests a seller’s market. But for now, the pressure on buyers is reduced and prices may rise less quickly. The best price you can get on a home may be the price you get today.

---

FHFA Home Price Index

Homebuyer.com uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.
Data: FHFA House Price Index. Do not reprint without permission.

Home Seller Psychology Shows Signs Of A Shift

Buying and selling real estate can be an emotional transaction – especially for buyers who meet the first-time home buyer definition and sellers who want to “move up.”

The two big emotions are fear and greed. They affect buyers and sellers oppositely.

In a down housing market, sellers feel fear. They worry their homes won’t sell. They cut prices aggressively and negotiate more frequently. Buyers can get greedy because seller fear spawns good deals.

In a strong housing market, however, the roles reverse. Sellers can show greed. They want more money for their and know they can get it. They push buyers and their buyer’s agent to bid over a listing price. They demand that buyers waive contingency clauses, such as the buyer’s right to a home inspection.

Fearful buyers accept those demands. They worry the next home will cost even more.

As June begins, home sellers are showing less greed. They’re cutting prices more rapidly than in prior months, and fewer home buyers are waiving inspection. Seller concessions, which buyers often use to get a lower mortgage rate, are now more prevalent, too.

Seller psychology is tilting toward fear.

Getting Starting With Your Purchase

If you plan to buy a home, start with a mortgage pre-approval.

Mortgage pre-approvals are a dress rehearsal for your eventual home purchase. Pre-approvals use today’s current mortgage rates to show precisely how much house you can afford to buy, while setting a realistic boundary for your purchase price and budget.

Pre-approved home buyers can access low down payment mortgages for first-time buyers, and find deals based on their job type such as these mortgages for teachers and mortgages for first responders.

Pre-approved buyers can also get access to first-time home buyer grants and programs, including mortgages with forgivable loans for down payment.

Pre-approved buyers do better, so get pre-approved today.