Welcome to our August blog, where we bring you expert insights straight from our team of mortgage professionals. This month, we sat down with Brad Mason, Legacy’s Assistant Vice President of Real Estate Lending, to get his take on the current housing market, emerging trends as of July 2024, and essential advice for prospective home-buyers. Whether you’re looking to buy your first home or considering a move, Brad’s expertise will provide you with valuable information to navigate the ever-changing real estate landscape. 

Join us as we dive into this informative Q&A session, designed to equip you with the knowledge needed to make confident and informed decisions.

Q: Now that 2024 is more than half-way over, what would you say the biggest difference is between the 2023 housing market and the 2024 housing market?

A: “The 2024 housing market has a lot of similarities to 2023. We are still experiencing above average sales prices and higher interest rates. This combination directly affects affordability and slows down overall buying activity from what we have seen in prior years. I feel like the biggest difference between this year and last is seller and buyer engagement.

Sellers are becoming more comfortable with the current markets which increases available inventory. We are still far behind a desired level of inventory but there has been positive growth.

Prospective buyers are beginning to adjust their expectations of the rate markets and easing into the market as well. As inventory grows buyers have a better chance at getting good deals on property while avoiding bidding wars. If rates begin to settle we should see further growth going forward.”

Q: At Legacy, we’ve seen a slow decline in interest rates over recent months. What kind of impact does this have on home-buyers? 

A: “A decline in rates has a positive impact on home-buyers. Lower rates mean more buying power. More buying power is valuable in a market where home prices are higher than average and continue to rise.”

Q: For many who secured a 30-year mortgage over the last few years, the interest rate was likely 6.00+%. A large portion of those buyers were hoping we would see interest rates drop below that 6.00% mark, so they refinanced their homes in 2024. Is there a light at the end of the tunnel for 2024? Or Should homeowners look to 2025 to refinance their homes?

A: “If the intent to refinance is based solely on lowering the rate, borrowers should look to 2025 and beyond. The general opinion is not to refinance unless your rate will drop by 1% on average. This is the range where you begin to see substantial savings and minimize the breakeven point for recouping the cost of a refinance. There are many reasons to refinance your home, but if it is purely rate motivated, it is best to wait for rates to decline further.”

Q: What common mistakes do you see home-buyers making in today’s market, and how can they avoid them?

A: “The most common mistake I see for homeowner’s is poor planning. Home-buyers tend to rush the process. It is very important to sit down and make a plan for your purchase. Planning ahead gives a home-buyer the chance to save appropriately, improve credit, shop lenders and terms, and research homes and neighborhoods. The home-buying experience is complex and rushing the process can lead to overlooking a lot of important details.”

Q: How important is getting pre-approved for a mortgage in the current housing market?

A: “Getting a pre-approval is very important in the current market. A pre-approval gives a buyer realistic expectations and focuses their search based on a price range. Home inventory is still low which drives competitiveness among buyers. In a lot of cases buyers are not able to view a home if they are not pre-approved. This is an active effort to weed out non-serious buyers. A pre-approval lets a seller know that a buyer has taken the first steps in securing financing.”

At Legacy, we are committed to supporting our members through every step of the home-buying process, ensuring you have the knowledge and tools needed to make informed decisions. If you are in the market for a new home, be sure to reach out to one of our knowledgeable real estate lending experts to get the personalized service you deserve.

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