Hello and happy spring, everyone.
This is Charles McShan from Century 21 Universal in Chicago, Illinois. This blog post asks the question,” Will 2024 be a good year for home buyers? Well, two things have not changed: 1:Interest rates are still high.2; A low inventory of homes for sale still plagues the housing market with no end. However, as the picture above shows, many enjoy the benefits of waking up in their own home and eating breakfast as a family before they go out into the world. If you want to buy a home, you are at the right place. I will share a few articles addressing this subject, and I hope you find value in reading this.
Article Guide
Could the average American afford to buy a home in 2024?
Regarding the sale of homes, let’s reflect on this past year of 2023., Wire News posted an article by Phil Hall. The article published on December 26, 2023, revealed this vital fact.”Only 15.5% of homes for sale in 2023 were affordable for the typical U.S. household, according to new data from Redfin (NASDAQ: RDFN). This decrease represents a drop from 20.7 in 2022 for a new record low: proper to the pandemic, more than 40% of homes are affordable. Redfin also noted 352.500 affordable listings in 2023, down 40.9% from 596,135 in 2022 and down from over a million per year during the prior decade.
Among demographics, only 6.9% of homes were affordable for the typical Black household, compared with 21.6% for the typical white household. The share was nearly as low for Hispanic/Latino households(10.4%) and was highest for Asian households(27.4%). The article concludes by saying this.”While 2023 was a rough year for home buyers, they predict 2024 will be better. Mortgage rates are now under 7% for the first time in months, and hopefully, lower rates will prompt more people to list their homes. And buyers will take advantage of the rates.” The determining factor will be homeowners placing their homes on the market in numbers. This will allow home prices to fall, and this will benefit all.
First things First!
I can assume that you already know the process of buying a home and all the associated steps, but for those who do not understand, please familiarize yourself by going to my blog post site, http://www.charlesmcshan.com, and looking for my four-part blog post series on the steps to homeownership. There is a lot of information there you need to know.
How did this low housing inventory affect Illinois and the Chicago area?
Good question. On December 21, 2023, Emily Mack of the Chicago Agent magazine wrote an article on this subject. If you wish to read it, please click the link here>>click here.
How can home buyers save on their mortgage?
An excellent article by Mary Dittman Tracey of The National Association of Realtors addresses that subject. It was posted last summer, but it still applies today. click here
If you are a service veteran, please consider the VA loan.
1 If you served in the United States military, the VA home loan will benefit you in your quest for home ownership. First things first, check your eligibility. Contact the Department of Veteran Affairs to see if you qualify. Your spouse could also qualify, so that is your second option. Your country recognizes the sacrifices you gave to keep this country free, and they will allow you to
1: Purchase a home with zero down payment. Yes, that is true. You do not have to struggle to save up for a down payment.
2: You could qualify for competitive interest rates.
3:PMI, short for Private Mortgage Insurance, is not required for VA loans. That means more money will stay in your pocket each month.
4:If you had credit challenges in the past, a VA loan has more lenient credit requirements.
5: Last but not least, the Federal Government will be on your side and offer support services if you have problems paying your mortgage. If you need help obtaining a VA loan, call me at 312 9143678
The FHA Loan
This sort of government loan has many benefits. Still, there is a major drawback you need to know upfront. FHA loans are good for townhomes and single-family homes. You will be deeply disappointed if you obtain an FHA loan and then go out and try to find a condo for sale in the Chicago area.98% of the condo association boards will not approve or accept an FHA loan. You will be spinning your wheels with disappointment. You will wind up being angry with your real estate broker. Why will they not accept your FHA offer? I will not answer that because we are now in a world where everyone is suing each other for what they say or type. So, I will tell you to research and go online, Google the subject, and you will find the answer to why. In the meantime, if you want to buy a condo, save yourself the headaches, leave the FHA loan alone, and apply for a conventional loan. I do not know what they do in the far suburbs or other parts of the state of Illinois. I am only talking about the Chicago area. That is my disclaimer. Ask your loan officer or a Realtor you know. Regarding a single-family home, if the seller qualifies and can pass an inspection, the FHA loan could be an excellent way to go. Nowadays, if you can find a home that needs work, the asking price will be lowered, and you might qualify for an FHA 203 renovation loan. If you wish to learn more about an FHA type of loan, Here is an article by Abby Badach Doyle of Nerdwallet. Please>>click here
Here are some programs that came in 2023 that can help home buyers.
Effective November 18, 2023, Fannie Mae dropped from 15-25% to 5% for the down payment on two,-three, and four-unit properties. This has simplified the process of buying a multi-unit building. Now, you can use Fannie Mae instead of only FHA.FHA loans typically have lower interest rates, but their additional buyer fees would clean your wallet/purse.
If you buy this type of property, you may be required to obtain a property manager’s license to deal with the general public regarding knowing and protecting tenant’s rights. Some out there say I heard the name Fannie Mae; I also listened to the name Freddie Mae. Who are they, and what is their purpose in the housing market? If you wish to learn more, please click here>> click here.
Are There Homebuying Assistance Programs for the year 2024?
This is an excellent question. Check out this article for an answer>click here.
Yes, things have changed in the housing market in Northern America. Gone are the days of excessive homes on the market for sale. Gone are the days of lowballing on and offer
What else will the year 2024 bring out for the home buyer?
Back in the day, numerous homes were on the market for sale. That excessive inventory allowed many homebuyers to lowball home sellers, and back then, many were successful. Years of low inventory have brought that strategy to an end. Inflation, low-interest rates, and the former coronavirus were all contributory factors. Homes for sale are few and far between. Many experts predict 2024 will see a surge of homes on the market. That will be a good thing for all involved.
The year 2023 also saw a massive jury verdict against the way Realtors do business. That verdict is in the process of being appealed, but the damage has been done. Many people have negative images of real estate agents, and that verdict has only worsened. Many felt that the real estate commission charged by agents did not favor the home sellers.
What they got wrong was that the home seller and the real estate agent negotiated a commission rate outside the home’s selling price. The selling agent would then split that commission rate with the real estate agent who brought a ready and willing buyer to the closing table. This is how deals get done; it is legal and has been done successfully for over 100 years. Here is a video that sheds more light on the subject. Click here.
A lot of people think we make too much money. They think all we do is put a for-sale sign in the wait and pray that it will bring homebuyers to the door. We do more than that. If you are a home buyer or seller and wish to see how much a realtor does on your behalf, please read the document. Yes, it will take you some time. So sit back with your favorite drink and check it out >>click here.
Yes, everything above is a lot of work, and sometimes, we do all of that and do not get paid because the deals fall through. We put out a lot of up-front money. I am not asking you to shed any tears for us. We like doing this and want to get paid fairly. If, in the future, the homesellers insist that all homebuyers pay their commission, so be it. In some areas of the country, it has been going on. Today, homebuying agents are insisting their clients sign a homebuyer-exclusive agency agreement. This states that if the home seller does not offer to pay their homebuyer agent commissions, then the homebuyer themselves will pick up the tab. How this will be done will be left up for discussion. If you want to see a copy of this document, please>>click here. Will the year 2024 be a good year for homebuyers? Yes, it will. Good days are already here.
Ten expensive tips first-time home buyers need to avoid.
Please read this article so you do not make the mistake some first-time homebuyers experience when buying their first home.
What do you need to look for when buying a home?
This National Association of Realtors article gives helpful insight on that subject. If you wish to read that article >> click here.
What does ABR mean in regards to a Realtor?
I am a certified Accredited Buyer’s representative, or ABR for short. What does that mean for the homebuyer?
please click this link to find out>>click here
What is going on with apartment rentals in 2024?
In a nutshell, rental prices are still rising throughout the Chicago area. This has been going on since the end of the coronavirus pandemic, and many apartment dwellers are still in a state of denial. Many people still call me looking for”Affordable rental units.” Those days are gone. The only apartment units that are still affordable are studio units and a few one-bedroom units. Many two-bedroom rentals now start at $1.450 to now over $2.000.Three bedrooms are $1.700 to over $3.500.Studio apartments remain from $895 to around $1.100. Depending on the location, you can still find one-bedroom rentals from $1.100 to about $1.600. Your credit score has to be 680 or over 700. If you cannot match that score, you will need a co-signer living in Chicago, and their credit score must be over 720. With high rental rates, Chicago has finally caught up to Boston, New York, Los Angeles, and San Francisco. If you are moving when your lease expires this Spring or summer, prepare for sticker shock regarding apartment rental prices.
Conclusion!
So, will 2024 be a good year for homebuyers? I will say yes. Look at the above photo. Those clients fought to the end, and they won. They succeeded. They found the home they wanted; they jumped through all the hoops, and at the end, they were smiling because they had received the keys to their home. They were victorious. Will that also be you? Hopefully, this blog post has provided you with some valuable answers. Experts are predicting a good year. Interest rates will soon drop, so they say. And more homes are slowly coming onto the market, but it will not be a cakewalk. Bidding wars are still common, and cash on the table still rules over mortgage loans. Home affordability is at its all-time low for most first-time homebuyers, but do not give up without a fight. If you cannot get what you really want get what you can afford for now and move up when you can I am here to help you. My office is in the heart of the West Ridge neighborhood in Chicago, but I am only a car ride from your area. Feel free to contact me using my contact information below.
What’s that? In this post, I did not discuss people wishing to sell their homes; I did not forget you. You will be the subject of my next post. Also, I have not addressed the recent Lawsuit settlement against the National Association of Realtors in this post. There are too many rumors out there, and people are trying to give Realtors a black eye, but more on that subject on another day. We realtors help our clients pay and sell properties. We have been doing this for over 150 years. If we were not doing it right, we would have been outlawed decades ago.
In conclusion, we will get through this. My office is open for business. We are in the West Ridge area of Chicago, only a car ride away from you. Spring is here, and the market will be hotter. I hope to hear from you soon. This will indeed be a good year for many homebuyers, and I hope you will be one of them. Once again, this is Charles McShan with Century 21 Universal.
Take care and see you next time.
312 9143678
Facebook http://www.Facebook.com/charlesmcshanrealtor/
Websitehttp://www.charlesmcshanchicagolandrealtor.com
P.S.: Spring has sprung, and if you are thinking of buying or selling a home this Spring, here are the latest editions of the 2024 Homebuyer and Home Selling guides. Please click the two links below for these free e-gifts, and feel free to share them with your friends, workmates, and relatives.
For a free homebuyer’s guide, click here
For a free home seller’s guide, click here
