The spring home buying season, typically the most active time of year for home shopping, is about to begin in earnest. This year, the market promises to be relatively calmer, offering more options for buyers compared to last year. Although the boost in newly listed homes is expected to be modest, it should translate to increased choices for home shoppers. Those prepared to move quickly may even find some relief in price reductions in their market.
"Affordability is still a major challenge, but those shopping now should see early-season price cuts on leftover or mispriced inventory," says Zillow® Chief Economist Skylar Olsen. "However, that may dry up fast as the weather and housing market warms with the season."
Key Factors in the 2024 Spring Housing Market
1. When Does the Spring Home-Buying Season Begin?
The spring home shopping season generally runs from April through June in most of the country. Warmer climates tend to start earlier, while colder regions may have shorter seasons starting later. Warmer weather and school schedules, especially for families planning to move during summer break, drive the seasonal shopping boost.
The busyness of any given market depends on various factors, including the economy, local wages, and the availability of homes for sale. Despite a persistent shortage of listings and high home prices, sellers are expected to list homes in greater numbers this spring, as buyers and sellers adjust to the higher interest rate environment.
2. A Seller's Market with Buyer Leverage
Nationally, it's still a seller's market due to competition for the limited number of listings. However, sellers must price their homes appropriately to meet buyers' affordability constraints. Buyers are stretched thin, and sellers need to be realistic about pricing to sell quickly and at the desired price.
Keep an eye on mortgage interest rates, which can significantly impact home affordability. If rates rise sharply, as they did in October 2023, it could push homes further out of buyers' reach and lead to more price cuts.
3. Inventory Trends
January listings show a slight improvement from last year, with new listings up nearly 6% and total listings rising more than 3%. Although there are more homes for sale than last year, the increase is not yet enough to shift the market in buyers' favor. Sellers remain in a strong position, holding a record amount of home equity that they may look to cash in.
4. Home Price Stability
Home values are finally leveling off after significant increases during the pandemic. Nationally, U.S. home values rose 3.6% last year, and about 26% of homes sold above their list price in January, three percentage points less than the previous month.
Most of the largest metros showed slight declines in home values in January, with New Orleans, Minneapolis, Buffalo, Cleveland, and Pittsburgh experiencing the largest month-over-month dips. Year-over-year, however, home values have increased in 47 of the 50 largest metro areas.
Zillow economists predict that homes nationally will appreciate by 3.5% in 2024, maintaining a similar pace to last year.
5. Volatile Interest Rates
Interest rates remain volatile as the Federal Reserve continues its efforts to control inflation. Mortgage rates can significantly affect monthly payments, so it's crucial to stay informed about rate changes and consider locking in rates or buying down the rate to lower monthly payments.
6. Fast-Moving Market
The typical time for a home to go from listing to under contract was 29 days in January, slightly less than a month earlier and two days shorter than a year ago. Competitively priced homes are selling in about two weeks.
Tips to Prepare for the Spring Home Buying Season
1. Get Pre-Approved
Getting pre-approved for a mortgage helps you understand what you can afford and positions you as a serious buyer. It also allows you to move quickly when you find the right home.
2. Talk to a Local Agent
Discuss your wants and needs with a local agent to understand market conditions in your desired neighborhoods. An experienced agent can provide valuable insights and help you navigate the buying process.
3. Use Zillow's Search Filters
Zillow's search filters can help you find homes that have been on the market for more than a month, potentially leading to deals or concessions. Filtering by monthly payment ensures you focus on homes within your budget.
4. Monitor Mortgage Rates
Stay informed about mortgage rates and explore options for locking in rates or buying down the rate to reduce your monthly payments.
The market continues to evolve, and, as it does, we'll share the latest information and analysis at our Learning Center. Remember, there is no universally "good" time to buy a home; the best time is when it aligns with your personal circumstances and financial readiness. Hang in there and stay prepared!
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