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Home values in these cities are projected to climb. Read on to find out which areas of the country may be the best to buy a house.
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Home affordability is at a 40-year low as soaring home prices and high interest rates have forced many potential home buyers to leave the market.
But for those still looking to buy right now and deciding which location is the best, some of the latest Zillow data, compiled by SmartAsset, could be helpful. The company says that there are a few places across the country where home values will rise the most through 2024, including:
Rio Grande, Texas: Projected home value increase of 12.3%, to $127,312Knoxville, Tennessee: Estimated home value increase of 9.5%, to $310,699North Miami, Florida: Projected home value increase of 8.8%, to $501,725Winston-Salem, North Carolina: Estimated home value increase of 8.7%, to $163,269Muskegon, Michigan: Projected home price value increase of 8.6%, to $171,940
Not only are these cities expected to see the fastest home value growth over the next year, but all but one city on this list is also far less expensive than the median U.S. home sale price of $431,000. This means you could score a relatively inexpensive home that still has a lot of potential to see its value rise next year.
Will home affordability get better in 2024?
Some experts are in disagreement as to whether home prices will increase or decline next year. Morgan Stanley said recently that prices could fall by up to 5% by the end of 2024 if interest rates remain high. Similarly, Moody’s believes prices could slide 3.5% by that time.
But Zillow predicts that prices will increase by 4.9% by mid-2024, and the National Association of Realtors estimates home prices will rise 2.6% through 2024.
And there’s no telling what will happen with mortgage interest rates, either. The latest U.S. Bureau of Labor Statistics data showed that inflation has started to cool, which could mean that the Federal Reserve may be finished raising interest rates.
The Mortgage Bankers Association estimates that mortgage interest rates could be 5.5% by the end of 2025. That’s a significant decrease from their current levels and indicates that 2024 could be a better year to buy a house.
What to do if you’re looking to buy a home soon
In addition to saving up for a down payment and finding a good real estate agent, here are a few things you can do to get ready to buy a home in 2024.
Pay attention to shifting rates: With inflation easing, potential home buyers may want to keep a closer eye on mortgage interest rates than they have been. Don’t make a move on a house until you’re financially prepared, but if rates dip and you’re ready to buy, then it may be time to make your move.Talk to more than one lender: When it comes to mortgages, you may want to get a second opinion. Not all lenders will view your financial situation the same, so do your research, shop around for the best mortgage lender, and compare offers.Pay off debt: Some lenders may have tighter restrictions on borrowing right now since home prices are high and interest rates are still elevated. Lowering your debt-to-income ratio by paying off credit card debt or other loans may help you secure a mortgage or get better loan terms.
Even if you don’t choose to buy in an area of the country where home values are increasing the most, getting yourself into the best financial shape possible will help you make the most of your home purchase.
And if you find the perfect home but don’t get the interest rate you were hoping for, remember that there’s always the possibility to refinance your mortgage at a lower rate later on.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.
