4 Things Every Home Buyer Needs to Know in 2024


Greetings from the trenches of the 2024 housing market — I’m buying a house this year, and it’s hard not to feel doomed. Not only are mortgage rates up, but housing supply is low. What’s a wannabe homeowner to do? Read on to find out.

1. It’s still a seller’s market

I hate to break it to you, but if you’ve been wishing, hoping, and saving the last few years, and are finally ready to pull the trigger on a home purchase, you are absolutely not alone. Unfortunately, the supply of homes isn’t sufficient to satisfy all comers — according to the National Association of Realtors, February 2024 saw just 2.9 months’ worth of homes for sale. To equalize the market between buyers and sellers, the supply would need to be higher — ideally, at least four months, and perhaps closer to six months.

2. Weigh all your mortgage options — and understand how much you’ll pay

If you’re a prospective home buyer, you probably already know that you’re going to pay a lot more for a mortgage than you would have in 2020 or 2021. As of this writing, the average rate for a 30-year fixed mortgage is 6.79%, according to Freddie Mac. The rate you get depends heavily on your financial profile, but even if you’ve got an exceptional FICO® Score, you’ll still be paying more than you want.

It’s incredibly important to dig into all your options for home loans. Depending on your life and financial circumstances, these might include:

  • An FHA loan (first-time buyers, those with less-than-stellar credit, or buyers with small down payments)
  • A VA loan (active military or veterans)
  • A USDA loan (for those buying in a qualifying rural area)

Even if you’re buying with a conventional loan, like I am, you still have options to explore. You can get a mortgage from a big online lender or a tiny local credit union — or any mortgage lender in between. And you have your choice of terms — the 30-year fixed-rate mortgage is an American classic, but you could get a 15- or 20-year term loan, or even an adjustable-rate mortgage (ARM).

3. Getting a mortgage pre-approval matters

Speaking of your mortgage options, it’s not enough to research and decide what type of loan to target. You should speak to some lenders and apply for pre-approval before you start your home search in earnest. Letting a lender put eyes on your real financial situation will give you peace of mind that you actually can, you know, buy a house.

More: Check out our picks for the best mortgage lenders

Imagine how disappointing it would be to dream about the day you get your keys, start house hunting without pre-approval, find a perfect house, then talk to a lender and learn that the mortgage rate you qualify for makes monthly payments unaffordable. Or worse — you can’t actually be approved at all, due to your existing debt, income, or credit score.

Save yourself some grief and get your finances vetted ahead of time. And if you find out that buying isn’t a good idea for you from a financial standpoint, you’ll gain insight into how to fix the problem. Maybe you need to increase your income to afford mortgage payments, or pay down some current debt to improve your debt-to-income ratio and get approved to borrow.

The other reason for pre-approval is a direct result of this competitive market. If you find the perfect home for you, and want to make an offer, you can do so quickly and confidently if you already know a lender is likely to give you final approval. Note that a pre-approval isn’t a guarantee that the loan will be yours, but assuming nothing major has changed with your finances and you’re not targeting a home that you can’t afford, it’s certainly a strong possibility.

4. Save as much money ahead of time as possible

This last one is a biggie. Buying a home is expensive — it’s likely to be the biggest purchase you’ll ever make. You’ve got to cover the down payment (and while there are $0 down mortgage options, it’s generally a good idea to put something down on a home purchase to give yourself some home equity from the start). Plus, there are closing costs, inspection costs, and more. And even after the ink is dry on all the paperwork you’ll sign at closing, the bills don’t stop. Now you’ve got a house to maintain, and all the expenses that go with it.

How do you cope? Save as much money as you can before you start the process. I started saving to buy a house near the end of 2022, knowing that the soonest I’d be looking to buy was early 2024. And I hit my initial savings target and then just kept saving — and I’m still saving. I’m glad I gave myself this much financial runway, and it’s making me feel better about buying a house again, after my disastrous first experience with homeownership.

Buying a home in 2024 is like running the gauntlet — there’s potential pain and pitfalls everywhere you turn. Keep these points in mind to give yourself the best chance of success, and good luck.

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