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Hartford Housing Highlights - July/August

Hartford Housing Highlights - July/August

The 2024 Housing Market: What Home Buyers Need to Know come August

As we dive into July 2024, the housing market continued to be a dynamic environment, shaped by several key factors including interest rates, inflation, and new home construction. Here’s a comprehensive look at what you can expect as a home buyer in today's market.

Interest Rates and Mortgage Trends

Interest rates remain a hot topic in the housing market. Following significant hikes by the Federal Reserve in 2022 to combat inflation, mortgage rates have been relatively high throughout 2023 and into 2024. As of mid-2024, the average 30-year fixed mortgage rate is between 6.5% and 7%. These high rates have made it challenging for many buyers, particularly first-time homebuyers, to afford homes​ (Realtor)​​ (Business Insider)​.

However, there is a silver lining. Inflation has significantly slowed, with the Consumer Price Index rising just 3.0% year over year in June 2024, down from its peak of 9.1% in June 2022. This deceleration in inflation suggests that the Federal Reserve might lower its benchmark rate later this year, which could lead to a decrease in mortgage rates. Lower mortgage rates would improve affordability, making it easier for more buyers to enter the market​ (Business Insider)​.

The Housing Supply Shortage

One of the most pressing issues in the housing market is the low supply of homes. The U.S. is currently short about 4.5 million homes, which has kept prices high despite the high interest rates. This shortage is particularly challenging for first-time buyers who are looking for affordable options​ (Business Insider)​.

The Role of New Home Construction

New home construction is playing a crucial role in addressing the supply gap. Builders are ramping up efforts to meet the demand, particularly focusing on constructing more affordable options. Hartford Homes is leading the charge on a new home type in Northern Colorado​ with an emphasis on a smaller, more eco-friendly footprint. The Bloom Cottages are designed to be intentional about square footage, rather than just maximizing it for the sake of size. Starting at 1,024 square feet, with 2 bedrooms and 1.5 baths, these highly efficient and functional living spaces are built on the idea that beautiful Colorado offers plenty of space to play, and a home is just one facet of this lifestyle.

Builders are also offering various incentives to attract buyers, such as price reductions, flexible financing options, and other perks. These efforts are helping to make new homes a more attractive option for buyers in today’s market. The focus on affordability in new construction is a positive trend that could help ease some of the financial pressure on buyers​ (Realtor)​.

 

 

Market Predictions and Buyer Tips

Looking ahead, experts predict a modest increase in home prices throughout 2024, with estimates ranging from a 3.8% to 6.1% rise by year’s end. This is largely due to the ongoing low supply and steady demand. For buyers, this means that while prices are likely to remain high, the potential decrease in mortgage rates could offer some relief​ (Business Insider)​.

Here are a few tips for navigating the market as a home buyer in August 2024:

  1. Get Pre-Approved: With mortgage rates still high, getting pre-approved for a mortgage can give you a clear idea of what you can afford and make your offer more attractive to sellers.
  2. Explore New Construction: Given the focus on affordability and the incentives offered by builders, new homes might offer better deals and fewer bidding wars compared to existing homes.
  3. Stay Informed: Keep an eye on interest rate trends and market forecasts to time your purchase strategically. Rates might decrease later in the year, improving your purchasing power.
  4. Consider Long-Term Benefits: While renting might seem more cost-effective in the short term, investing in a home can build equity over time, providing long-term financial benefits.

Conclusion

The housing market in July 2024 presented a mix of challenges and opportunities for home buyers. High interest rates and low inventory continue to be significant hurdles, but the increase in new home construction offers a promising avenue for those looking to buy. By staying informed and exploring new construction options, buyers can navigate this complex market more effectively and make informed decisions that suit their financial goals.

Navigating today’s housing market requires careful planning and staying up-to-date with the latest trends and forecasts. Whether you’re a first-time buyer or looking to upgrade, understanding the current landscape will help you make the best decisions for your home-buying journey.