For those dreaming of becoming homeowners, the current real estate landscape can seem challenging. With high prices and limited options, it might feel like a daunting task. But if you’re determined to buy a home, the long-term benefits often outweigh the challenges of the current market. It’s a bit like waking up at 5 a.m. for a tough workout – it might be hard, but the results are worth it.
With some strategic thinking, you can make the most of the current real estate conditions. Here’s your game plan for buying a home in Myrtle Beach in 2024.
The Challenge: Stubbornly High Mortgage Rates
Buyers have faced the uphill battle of rising mortgage rates. In 2022, the average 30-year fixed rate went from 3% to nearly 7%. By October 2023, rates reached over 8%, a surprise even to experts. But in November, they dropped slightly to around 7.03% for the week ending December 7.
Higher interest rates mean pricier mortgages. For instance, if you can afford $1,800 per month in principal and interest, at a 3% interest rate, you could borrow $426,900. But at 7%, your borrowing power drops to $270,600, costing you an extra $156,300 in mortgage interest.
However, there’s some good news for 2024. Economic signals suggest that mortgage rates may improve as the year progresses. Experts predict that 30-year mortgage rates may dip below 7% in the latter half of 2024.
Your Strategy: Research and Compare Mortgage Offers
Don’t wait too long due to high interest rates. When rates drop, competition rises, so start house hunting now. Regardless of rate fluctuations, shopping around for mortgages is key. Get estimates from at least three lenders to potentially save $100 per month or more, according to the Consumer Financial Protection Bureau. Pay attention to the annual percentage rate (APR), which includes fees and charges.
Some lenders may offer “buy now, refinance later” deals or temporary buydowns that reduce monthly payments for a limited time. Before committing, ensure you understand the terms and potential hidden costs.
The Challenge: Low Inventory
Existing home sales have hit a 13-year low as of October 2023, with a 3.6-month supply of unsold homes. A balanced market typically has a 5 to 6-month supply. Sellers hesitate due to rising prices and a “rate lock-in effect” where they would pay more for a similar house or double their mortgage for the same-sized home.
However, there’s hope with increasing single-family construction permits and modest inventory growth in 92% of markets over the last three months.
Your Strategy: Expand Your Search
While you can’t control what’s on the market, you can adjust your expectations. Rather than waiting for the perfect home, consider a “good enough” option. This is especially important for first-time buyers eager to build equity. Remember, real estate is a solid investment, and waiting could cost you tens of thousands of dollars.
Consider expanding your search to condos or townhouses, accepting fewer amenities, or tolerating temporary imperfections. Over time, you can use your equity to remodel or upgrade.
The Challenge: High Prices
Housing affordability is at its lowest since 1984. Rising home prices outpace income growth, while higher mortgage rates increase borrowing costs. The median home price reached a record high of $391,800 in October 2023, requiring buyers to pay $2,567 per month in principal and interest.
Price drops may be unlikely until supply catches up with demand, which is another reason to enter the market now.
Your Strategy: Establish a Realistic Budget
Set a realistic budget by consulting with a financial advisor or using an online calculator. Understand how lenders determine eligibility, factoring in credit scores, savings, and debts. Find a real estate agent in Myrtle Beach who is experienced in your local market to help you navigate within your budget.
Winter can be a good time to search since there’s less competition. Focus on houses you can genuinely afford rather than ideal ones you can’t.
The Challenge: Multiple Offers and Limited Cash
Over a quarter of homes are still selling above list price, with a median of 23 days on the market and an average of 2.5 offers per listing. First-time buyers typically have less cash to compete, with a median down payment of 8%, compared to repeat buyers’ 19%. Cash sales are also on the rise.
Your Strategy: Leverage Your Position
A skilled real estate agent can help craft a strong offer, even if you don’t have the most cash. Speed can be your ally. Some sellers prefer quicker closings, so having all paperwork in order and a mortgage preapproval can make your offer attractive. Flexibility with closing timelines can also sweeten deals.
However, never skip a home inspection, even in a competitive market. It’s essential to uncover any potential issues before you buy a home in Myrtle Beach.
The Bottom Line: Be Realistic
High prices, low inventory, and tough competition can be disheartening, but it’s essential to set realistic expectations. Waiting for better rates or prices might not pay off in the long run. Instead, aim for a home that fits your needs and budget, knowing perfection can be elusive.
Buying a house in 2024 might be challenging, but with the right strategy and mindset, you can achieve your homeownership goals.
Now is the time to buy a home. Don’t wait too long. Take action and make your homeownership dream a reality! Call Full Potential Real Estate, LLC now.
Like our Facebook page for more information about buying or selling homes.