11 Things to Know When Buying a Home: Summer 2024 Update

Welcome to the "Things to Know" corner of the Home Buying Institute. On this page, we explain some of the things home buyers should know when buying a house during the summer of 2024.

We've covered everything from real estate market trends to mortgage loans, to give you the information you need to succeed when buying a home.

11 Things to Know When Buying a Home in 2024

1. Home prices are currently rising in most U.S. cities.

As of early summer 2024, home prices in most U.S. cities were rising gradually. The median home price in the U.S. is currently around $360,000. According to Zillow, the median price for the nation as a whole has risen by around 4.3% over the past year or so.

2. But some cities are still seeing price declines.

Not every city in the U.S. is experiencing price growth at the moment. Some local real estate markets have remained flat during the first half of 2024, while others are still seeing price declines.

Austin, Texas (one of the hottest markets from 2000 – 2022) is one of those metro areas where prices continue to drop in 2024. This makes it an anomaly, bucking the national trend.

This also illustrates the importance of conducting local market research. Before buying a home, you need to know what prices are doing in the area where you plan to buy.

3. House values expected to continue climbing into 2025.

The latest forecasts suggest that home prices in the U.S. will continue climbing at a moderate pace through the end of 2024 and into 2025. We are seeing forecasts for the next 12 months that range from 1% to 5%, for estimated home price growth.

But these are national forecasts. As mentioned above, you need to know what's happening in your local area before buying a home. You can find this kind of information on Zillow, Redfin, Realtor.com, and possibly through your county or state Realtor association.

While no one can predict future trends with complete accuracy, we at the Home Buying Institute agree that prices in most U.S. cities will continue to trend upward. This is largely due to lingering inventory shortages that force buyers to outbid one another.

4. There are more homes available in most U.S. cities.

We're happy to offer some good news on the supply front. A recent report from Realtor.com showed that the total number of real estate listings nationwide rose by 30% over the past year.

This trend could benefit thousands of home buyers who are planning to make a purchase during the summer months of 2024.

But once again, local research is warranted. Before buying a house, you need to know what the inventory situation is like in your area. This will affect everything from your ability to find a home to your negotiating ability.

You can find local inventory information on several websites, including the and your local news sources. And it never hurts to Google it (e.g., "[your city] housing market inventory").

5. And the most affordable metros for home buyers are…

The Realtor.com report mentioned above also provided a list of the 10 U.S. metro areas with the lowest required income needed to buy a median-priced home.

To calculate this, the company's analysts used an affordability price-to-income ratio of 30%, a down payment of 20%, a 30-year fixed mortgage rate, and local tax and insurance rates.

(Side note: A down payment of 20% is not always necessary. Some mortgage loans allow borrowers to put down as little as 3% to 3.5%.)

Here are the most affordable metro areas for buyers in 2024 based on that analysis, with the income needed for a median-priced home purchase.

• Pittsburgh, Pa. – $67,000
• Detroit-Warren-Dearborn, Mich. – $69,000
• Cleveland-Elyria, Ohio – $71,000
• Birmingham-Hoover, Ala. – $75,000
• Buffalo-Cheektowaga, N.Y. – $79,000
• St. Louis, Mo.-Ill. – $82,000
• Rochester, N.Y. – $87,000
• Indianapolis-Carmel-Anderson, Ind. – $87,000
• Louisville/Jefferson County, Ky.-Ind. – $87,000
• New Orleans-Metairie, La.- $90,000

6. Mortgage rates are currently hovering in the 7% – 7.5% range.

After dropping at the end of 2023, mortgage rates crept up a bit during the first few months of 2024. The average rate for a 30-year fixed-rate mortgage (the most popular loan type among home buyers) was hovering around 7% at the start of summer.

It's hard to say what mortgage rates will do going forward, because the Federal Reserve is taking a wait-and-see approach with its own rate cuts.

Rates change constantly. So you'll want to keep an eye on this throughout your home buying journey—or at least until you lock in your own mortgage rate.

7. A recent lawsuit could affect how home buyers pay their agents.

In 2024, home buyers also need to know about a recent lawsuit involving the National Association of Realtors (NAR). It could affect the way you pay your real estate agent's commission.

The NAR settlement might make it easier for you to negotiate the fees that buyers pay for their real estate agents. It could also give you more ways to pay, such as paying a flat fee or by the hour, instead of a percentage of the home price. However, these changes are not guaranteed and may take time to become widespread.

This article on Bankrate.com does an excellent job explaining these recent changes and what buyers need to know about them before buying a home.

8. The 30-year fixed is the most popular mortgage for buyers.

As of early summer 2024, the 30-year fixed-rate conventional loan is the most popular type of loan among home buyers in the U.S.

But it may or may not be right for you , depending on your individual circumstances. Before buying a home, you should know about and consider all of your mortgage options.

A lot of buyers prefer the 30-year fixed for two reasons:

• It spreads the payments out over a longer period of time, thereby reducing their size.
• The interest rate stays the same for as long as you keep the loan, eliminating surprises.

But in other situations, a shorter loan term (or even an adjustable mortgage rate) might work better for the buyer. You'll need to consider your short-term priorities and long-term plans to choose the right mortgage. Here's how to do that.

9. Down payment gifts can clear a path to homeownership.

If you're planning to buy a home but struggling to save for a down payment, you should know that most mortgage programs allow for down payment gifts.

One common example is when a parent gifts money to a son or daughter, to help them cover the upfront cost of the down payment. But the money could come from other sources as well, such as a sibling, close friend, employer, or charitable organization.

10. You don't necessarily need a 20% down payment.

Surveys have shown that many home buyers believe they have to make a down payment of 20% when buying a house. But you should know that's not always the case.

The average down payment among first-time home buyers is currently around 7%. And it's possible to go even lower, if you meet certain eligibility requirements.

Some mortgage programs (like Fannie Mae's "HomeReady" and Freddie Mac's "Home Possible") offer a low down payment of 3%. FHA loans only require 3.5% down, while VA loans allow military members and veterans to finance the entire purchase price.

11. Rising material costs have made new homes more expensive.

If you're thinking about having a home built, or purchasing a newly constructed home, you should know the cost of lumber and other materials has increased. So you might end up paying more for a new home compared to an existing property of similar size.

According to a May 2024 report from the National Association of Home Builders:

"Higher construction costs get passed on to home buyers in the form of higher prices, making it increasingly difficult for people to afford new homes. This can exacerbate existing housing affordability issues and slow down the overall housing market."