Strategy for Buying a Home in 2024/2025

Time passes so quickly. Do you remember when you first thought of buying a home and didn’t?

Were you smart and avoided a disaster? Or did lose because you could have been building equity and enjoyed other advantages. The point is that in 2024’s market involving bidding on high-priced homes and qualifying for home loans, you need to be well prepared and strategic to avoid disaster and disappointment.

There are opportunities across the country as more homes are listed and some cities actually see prices dropping. By 2025, you will have significantly more housing stock to choose from. 14.6% of homes listed in January saw price reductions.

Gen Z’s and Millennials Need to get in Gear

If you’re a Gen Z or Millennial-aged, it’s important to get yourself fully prepared to buy a home, and buy it when you’re ready, perhaps in late 2024 or 2025. Too many wait until they’ve magically found some money and then buy a home they don’t need on a whim.  Others still don’t strategize and lose to other buyers who are prepared, outmaneuver and outbid them.

NAR polled buyers and found many have had good increases in income of late and this might result in them bidding up prices and buying more home than they need.

Jessica Lautz, NAR deputy chief economist and vice president of research said “In a still-competitive housing market, more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash.”  So you’ve got stronger competition this year.

These prized assets are really expensive. You’re wise to respect the buying strategy you’ll need to get into your first home or next home. In this post, you’ll get clarity on getting organized to find, finance, and win your dream home or investment property. And that’s important because institutional buyers and small rental property investment groups will also be trying to buy these houses, leaving you out on the street.

Don’t Count on a Housing Market Crash

While you might believe that young people have given up all hopes of buying, new polls show buyers are optimistic in 2024. And there are rumors many hope for a housing market crash so they get a golden opportunity. Well, truth is, there is big demand for housing yet limited supply. Home construction will not meet demands. And there are buyers with the cash/financing ready to buy a home, but will they buy smartly? Do they really know what they’re doing?

According to one report, 97% of buyers have already taken the initial steps. But are these prospective buyers ready to buy a house they need, or will they choose unwisely, pay too much and get stuck with massive mortgage payments for too long?

Forget the selling price, as there are plenty of challenges ahead such as that it will be a continuous seller’s market until mortgage rates drop by at least 2%. The more you know from your research and resources, the more likely you can time your entry into the market when home prices are lower and mortgage rates are lower. That might be late 2024 or next year. 2025 might be a good year given a lot of locked-in sellers will be able to unload their properties. That’s good timing!

Here are the 3 Elements of Homebuying:

  1. Finances (establishing a budget and acting to save the money)
  2. Readiness (knowing your needs, interviewing Realtors, assessing property values)
  3. Opportunity (building a network of home sources in neighborhoods/cities you want to live in)

Getting Financing Prepared

Given the outrageous cost of buying, establishing a realistic budget, and identifying how you’re going to save for the downpayment is number one. Because this is big business with serious monthly mortgage payments. You’ll need to find a good mortgage agent and learn about financing options and strategy and creative lending practices.

Deciding on the type of mortgage to use (short-term ARM or 30-year fixed rate) is extremely important given the cost potential.

You’ll need to prop up your credit rating because it will impact you’re acceptance and mortgage payments. Acquire copies of your credit reports from either Experian, Equifax or TransUnion — and dispute any errors that may lower your credit score. Getting pre-qualified from your bank or a secondary lender helps you get oriented so you don’t have that extra pressure when you need to buy.  Inquire about FHA loans which a great helper for buyers with limited savings or lower credit scores.

Getting Yourself Ready

Being educated on homes, moving costs, closing costs and fees and commissions, legal matters and documents is wise. You’ll want to be sure yourself about assessing property valuations and local comps because it’s your money. You must interview many Realtors to find one you trust and believe in.  You should study bidding strategies and how to act quick to steal a property away from slower house hunters. Most new buyers hire the first Realtor they see online and that’s not a good practice.

When it comes to buying then, you won’t be making impulsive decisions that lead to big regrets and financial problems and losses. 60% of buyers today have buyer’s remorse, so they didn’t prepare well.

Finding Best Opportunities

Realtors find opportunities and so should you. It means building pipelines and networks with people who can alert you to properties for sale in the neighborhoods and cities you want to live in. It would include alerts to the type of house or semi-detached home that’s good for you such as a fixer-upper, new build, or one in a small city or town nearby.  Build your own web of leads and don’t just rely on a real estate agent’s circle.

First Time Buyers

Here’s a situation where bad decisions can flourish. If you’re one of those who learns from experience, this could be a painful year for you.  First-time homebuyers should have a full, foolproof plan, because they are leveraged to the hilt with little room for error. Conversely, first-time home sellers could find themselves losing tens of thousands when they get outfoxed by smart buyers and sell at the wrong price.

Find out more about the features buyers want, how sellers are preparing to sell, and the best time to buy a house.