While many potential homebuyers were knocked out of the market by higher mortgage interest rates and home prices in 2023, there’s hope on the horizon that they’ll have better luck in 2024.

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Banks are tightening their lending standards due to increases in credit card and car loan delinquencies, according to Freddie Mac. This is also impacting mortgage applications, credit lines and refinance activity - loan originations were down approximately 30% in October 2023 from the previous year. The good news is that mortgage delinquencies are low compared to other loan types.  Consumer spending will decelerate due to slower economic and weaker employment growth, which will cause rates to come down. Continuing homebuyer demand will keep home prices rising about 2.6% in 2024, but with rates dipping as low as 6%, housing will still be a li!le more affordable.

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If you’re planning to buy a home in 2024, Lending Tree recommends that you have at least a 3% down payment for a conventional loan –a loan that’s “originated, backed and serviced by private mortgage lenders like banks, credit unions and other financial institutions.” If you have less than 20% down, expect to pay for private mortgage insurance (PMI) between 0.14% and 2.33% of your loan amount in annual PMI premiums. To get the best interest rate and lower PMI premiums, your credit score must be at least 780 or higher, or you’ll pay a higher interest rate.

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