After two consecutive years of historically high interest rates, Americans are growing optimistic that 2024 is the year that they will finally be able to purchase a home. In fact, according to Yahoo News, American’s optimism regarding the housing market has not been this high since April 2022.

Many Americans have been holding off on buying a home until more favorable house loan interest rates emerge. And, if you are one of the patient Americans looking to buy, there’s good news for you! At the start of this year, Fannie Mae predicted that mortgage daily rates will reach a low of 5.8% for a 30-year-mortgage, by the end of 2024. This is a considerable drop, given that mortgage rates were at 7.30% just last year.

In 2020, Americans experienced record low interest rates, granting many of them the chance to purchase their dream homes at unbelievably affordable rates. The real estate market in 2020 was characterized as a buying frenzy, complete with bidding wars that led many homes to sell over their asking price. But, since then, the housing market has largely cooled off. Interest rates have shot up, resulting in a slow down for real estate sales and a slump in home prices.

But, with rate cuts on the horizon, it looks like 2024 may be the year that many Americans have been waiting for. Because rates are dropping, but not going back to 2020 levels, this is the year that many Americans will finally be able to secure an affordable mortgage towards a home, hopefully without the buying frenzy.

As we await the Fed to make a decision on current mortgage interest rates, it can be useful to start imagining what lower rates can mean for you. Lower interest rates can be an ideal condition for first time home buyers and investors; with lower rates, it can be easier to qualify for a loan, and the loan will be more affordable.

However, a drop in current mortgage rates may also accompany an increase in housing prices and greater competition in the housing market.

In previous years, many purchased properties to convert into Airbnbs or VRBOs as a way to make additional income. However, in 2023, many of these Airbnbs experienced low occupancy rates and sat empty.

Many of these rental properties were purchased in oversaturated and competitive markets, such that the supply of available short-term rentals overwhelmed demand, and could not make sufficient bookings.

In addition to low occupancy rates, there are potential regulations on Airbnbs in cities like NYC and Palm Springs that pose a risk to the long term profit viability of this business model. These conditions are not necessarily ideal for purchasing a property simply for Airbnb.

The threat of more regulations on short-term rentals and the threat of low occupancy rates may indicate that 2024 will be a less competitive housing market, allowing more first time buyers to succeed in purchasing a home.

Another thing to consider when deciding whether to purchase a home in 2024 is the boom in rent prices across the U.S.A, and how that may impact Americans’ desire to purchase a home. As of August 2023, the average U.S rent is $2,052, which is just 2% shy of the record rental prices that the U.S. witnessed in 2022. At $2,052 per month in rent, it may be in your interest to get a mortgage on a home or apartment.

For many Americans, 2024 may end up being the perfect time for them to buy a home

If you decide the time is right to apply for a mortgage, here’s what you should do to improve your chances at purchasing a home in 2024.

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