Will buying a home be affordable in 2024?

Will buying a home be affordable, According to a Halifax review, “house prices rose in January as the four successive months.” The average price of property rose in December is £3900. However, it is still slightly lower than in December 2023.

Additionally, recent reports suggest that falling house rates and low inflation attract buyers. It is the reason the experts believe the house prices may fall in 2024 as the market adjusts to the high borrowing costs.

 As the property market struggles to combat the market challenges, will house prices fall in 2024? Let’s understand.

Is there a demand for the property in the market?

High mortgage rates and the cost-of-living crisis impacted the demand in the housing market. Alternatively, the number of individuals seeking homes or property will increase by 10% in 2024 beginning. Despite a good number of individuals seeking homes, around 95% of the asking price as purchasing power is reduced because of high mortgage rates.

Thus, house prices may need to adjust to the mortgage rates. Mortgage rates, which are 5% right now, may reduce to 4-4.5% in 2024. It clearly states that the sellers must not have unrealistic expectations from selling the property. Additionally, they must seek expert advice to get the best price for their home.

Even if mortgage rates fall, the buyers and sellers may seem stiff competition. It means even if you clock a home for low rates, high mortgage rates may make the profit negligible.

Is now a good time to buy a house?

One must wait and research the best times to buy a house. At this time, both mortgage rates and house rates are slightly low. However, buying a home depends on economic, geographical and personal financial situation. While mortgage rates are slightly low, the rising demand may push the mortgage curve higher.

Remember that buying a house is a big commitment, especially for first-time buyers. So, if you have saved enough for the mortgage deposit (20% of the house payment as a down payment), can engage in a long-term payment commitment and finalise the location, you may buy one.

However, analyse the location and long-term property growth before investing. It will help you ensure only value-enhancing home updates according to standard parameters.

Should first-time home buyers purchase a house?

Owning a home is the biggest dream for first-time buyers. From planning the best home construction to shifting into the dream home, everything seems surreal. However, individuals buying their first property must analyse a few aspects before purchasing a house in 2024. The below reveals a scenario where you can buy or wait to buy your first property:

The right time to buy a property

You can buy a property if your finances and economic conditions meet the following aspects:

1) No worries about moving out

Individuals owning their home would not need to worry about renting the apartment. Moreover, there is no timeline to move out as a homeowner.

2) Can maintain regular mortgage payments

Exploring the best mortgage rates to suit your payment system is critical. Identify whether you can continue mortgage payments for the long term. Usually, the mortgage agreement lasts for 25-30 years. It requires financial commitment without impacting the budget’s bottom line. Additionally, the mortgage payments may rise and fall according to the economic impact.  You must have enough flexibility to deal with the change.

3) Share no or little debt

It is one of the most important parameters when buying a property. Mortgage providers analyse a person’s total debt before providing or finalising the mortgage agreement. If your current liabilities may impact the mortgage payments, he may deny the loan approval. Individuals with debts like- car loans, car finance, credit card pending payments, penalties and other heavy debts may struggle to get one.

Alternatively, if you have your debts sorted out without status like- bankruptcy, insolvency, or penalties, you may get the mortgage.  

Sometimes, debts prove the greatest barrier to securing a dream home. You can settle it by seeking financial solutions like- an unsecured personal loan for your needs. 

It is a financial flexibility that helps you achieve lifestyle goals without relying on your present financial situation.

3 Signs you must delay the house purchase in 2024

2024 may not be the year for some individuals to invest in a property purchase. The reasons and signs that you must wait to purchase a home are:

1. Higher mortgage rates

Despite the falling mortgage rates, the status reveals higher rates in 2024 than in 2023. Thus, the rate you may get now for your property may be higher than the last year.

High mortgage rates impact purchasing power, require one to pay more towards the agreement and may impact other financial aspects. Thus, if you have not begun with the property exploration or mortgage rates research, wait until the situation improves.

2. Negative equity possibilities

Analyse the existing and future rates of the property you put up as a mortgage for your next property purchase. If the price of the existing homeowner’s property falls below the mark, you may enter negative equity. It means your house value falls below what you borrow for your next home purchase. In this case, the mortgage provider may recoup the losses by claiming the property.

However, this is the case for those individuals who want to sell their property before buying the house.

3.      Not enough Deposit

It is one of the important aspects to consider for your home purchase. Generally, you must pay 20% of the house price as a deposit to qualify for the mortgage agreement. It reduces your liability towards the mortgage payment and fetches lower interest rates.

If you are living from paycheck to paycheck and cannot save enough for a deposit right now, you must wait. It may not be the ideal time to buy a property for you.

Bottom line

The above comparison and the facts may help you decide right for your property purchase. Apart from the above parameters, consider additional costs like- banking fees, legal fees, loan confirmation or establishment fees, etc. Additionally, check the prepayment fee and penalty costs while comparing mortgage providers. It will help you plan things accordingly.

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