Should You Buy a Home Before Year-End?
As the end of 2024 approaches, prospective homebuyers are asking: is this a good time to purchase a home? Historically, the final months of the year bring unique opportunities for homebuyers, yet market dynamics, particularly in an election season, add layers to consider. Let’s break down the trends we’re seeing and how they might impact your decision this holiday season.
Year-End Trends: Why Winter Often Favors Buyers
During the end of the year, especially in December and January, the real estate market tends to cool off as the holiday season kicks in. Fewer buyers are actively looking, giving those who remain in the market an advantage. Historically, the National Association of Realtors (NAR) reports that sellers who list at year-end are often motivated to close quickly, increasing buyers' chances of negotiating on price or securing additional incentives like closing cost assistance.
In addition, Realtor.com data shows that listing prices often dip in December, as sellers reduce prices to attract buyers before the holidays. This seasonally-driven market condition can mean more affordable deals for buyers and less competition compared to peak buying months like spring and summer. For investors, purchasing at year-end also offers potential tax benefits, as expenses like mortgage interest and property taxes can be deducted within the same tax year.
Election Year Dynamics and Post-Election Trends
With the election only a week away, it’s worth considering how election outcomes may influence buyer and seller behavior. Typically, presidential election years see a period of uncertainty as consumers wait for policy directions to become clearer. A Zillow analysis indicates that this “wait and see” approach is common during election seasons, often resulting in a slight dip in real estate activity as people await economic forecasts.
However, the post-election market often sees increased consumer confidence, which can stimulate market activity. The certainty that follows an election generally encourages buyers and sellers to proceed with their plans. While it’s unclear how this year’s election results will affect mortgage rates, recent trends suggest the market could stabilize shortly after the election as consumers and investors move forward in a more predictable policy environment.
Unique Factors for the End of 2024: Increased Inventory and Mortgage Rate Volatility
This year, several unique conditions could make the year-end market especially appealing for buyers:
Rising Inventory Levels
Inventory in the Orlando area has increased significantly, with 31.9% more homes available compared to this time last year. This rise in listings gives buyers more options and reduces competition, which often leads to better deals.Mortgage Rates at a Two-Year Low, But Potentially Volatile
Mortgage rates, which had been rising through much of 2023, recently dropped to their lowest in two years, offering buyers increased purchasing power. This rate dip has given buyers approximately $74,000 more in purchasing capacity compared to earlier in the year. However, potential rate changes by the Federal Reserve before year-end could introduce some volatility, so buyers who are ready may want to consult their lenders about securing rates sooner rather than later.Ongoing Economic Considerations
Although inflation and global economic concerns have caused some market hesitation, the National Bureau of Economic Research (NBER) points out that these factors also work in buyers’ favor, as motivated sellers may prioritize closing deals sooner rather than later.
Should You Buy Now? It Depends on Your Unique Situation
While the end of 2024 presents favorable conditions for many buyers, it’s important to weigh this decision carefully. Factors such as your financial stability, risk tolerance, and investment goals play a significant role. What may work well for one buyer might not be the best choice for another, especially given the unpredictability of post-election policies and economic changes.
If you’re considering buying a home or investment property, speaking with a financial advisor can provide a tailored perspective based on your situation. While trends indicate potential benefits to buying now, this is ultimately a decision that should reflect your personal goals and circumstances.
If you're ready to explore your options or have questions about navigating the current market, reach out to Stefany Marcelino. As an experienced Orlando real estate agent, Stefany can guide you through every step, helping you make informed decisions and start your real estate journey with confidence.
