Buying your first San Diego home is a mega milestone. Real-life stuff. But that one big financial decision is actually made up of many small choices.

Before you start shopping for furniture, you’ve gotta prepare for everything the house San Diego hunt may have in store, including the home financing process. Don’t worry—we can help.

We teamed up with Movement Mortgage to chat about all things homebuying and came up with six surefire ways to simplify the process so you can find your San Diego dream home ASAP. Let’s get started.

Step 1: Find a trusted home loan expert.

You can’t be too informed when you’re starting the homebuying process. Whether you’re just starting to shop or you’ve been perusing the real estate apps for years, you need to know your financial options.

With Movement Mortgage, you can connect with an independent mortgage broker in San Diego to learn more about different home loan options, current rates, and what you need to do to get preapproved. Your home loan expert will help you get a clearer picture of your finances and what you can afford.

Step 2: Build your budget.

Now it’s time to build your budget.

Obvious alert: Know your budget before you start house hunting. We know it’s exciting to tour homes and check out potential San Diego neighborhoods, but you don’t want to waste your time—or get attached to a property that’s miles outside your price range.

Your budget may be the most important part of your homebuying journey (other than finding your dream home, of course). Once you know what you can afford, things start to get real. When you work with an independent mortgage broker, they can help you outline your budget if you’re unsure — plus, you can save an average of $10,662.*

Step 3: Explore first-tome homebuyer loan programs.

As a San Diego homeowner newbie, you may be in luck: First-time homebuyers have access to a variety of home financing programs designed to make homeownership more attainable. These home loan programs often include down payment assistance, which helps reduce the up-front costs associated with purchasing a home. Score.

Recently, some lenders have rolled out 0%-down-payment programs. Zero-down-payment programs are often reserved for buyers who meet specific qualifications, like not exceeding a certain income level. That means qualified homebuyers could purchase a home with no down payment required.

And government-backed loans offer first-time homebuyers even more home loan options. For example, if you’re a first-time homebuyer looking to buy in a rural area, you may qualify for a USDA loan, allowing you to put as little as 0% down on your home purchase. Additionally, FHA loans could let you bring as little as 3.5% down to closing, depending on your credit score.

Step 4: Get preapproved.

This is your final step toward actually being able to make an offer. Think of a preapproval as your announcement to the world that you’re serious about buying a home—and you’ve got the $$$ to prove it.

You typically need a preapproval from your lender before you can move forward and start making offers on potential homes. It formally defines your purchasing power and shows sellers and real estate agents that you’re committed to buying a house.

Here’s how the preapproval process works: Your mortgage broker will order a credit report and help you do a complete analysis of your financial situation. Your credit history + score, assets, past employment, income, debt-to-income ratio, and liabilities all play a part in determining the loan amount you qualify for. Once you’ve reviewed everything with your mortgage broker, you’ll get your preapproval letter in hand.

Step 5: Determine your wants vs. your needs.

Now that you’ve got the initial paperwork done, it’s time to start laying out exactly what you need in a San Diego home—as well as what you’d like.

Divide this list into three categories: non-negotiables, nice-to-haves, and no-thank-yous.

Your non-negotiables are the things your home absolutely must include. Maybe it’s a backyard for your fur babies, a nursery for your human babies, some extra closet space, or a kitchen island. These must-haves will help you shop more efficiently.

Nice-to-haves, as the name suggests, are the features you’d like but don’t necessarily need. Having a basement might be nonnegotiable, but having a finished basement? That’d be great. Nice-to-haves don’t make or break a listing, but they can help you make your final decision.

Lastly, you’ll need to know your no-thank-yous. These are the dealbreakers—the features you do not, under any circumstances, want in your first home. Hate highway noise? Want the freedom to decorate without HOA restrictions? Make sure you know your dealbreakers up front.

Knowing what’s important to you will help narrow down the search and save you from a disappointing in-person tour.

Step 6: Know the mistakes to avoid.

Now that we’ve covered your homebuying to-dos, let’s talk about what not to do. Buying a home may be the biggest financial decision of your life. Don’t put it in jeopardy by making other big purchases at the same time.

It’s all about stability. Now is probably not the best time to quit your job or open a new line of credit. Big purchases, like furniture or cars, should wait until after the paperwork is done and you’ve picked up the keys to your new castle.

Ready to get started? Find a local home loan expert in your area with Movement Mortgage. Happy house hunting, future homeowners.

Bottom Line

With the cost of homeownership so high in Southern California, making the right decision about buying or selling a home can feel like a real challenge. Whether you're downsizing, upsizing, investing or cashing out all together...if you’re open to having the right team put in the work for you, we can get it done.

Hennin Foreman and The DHC Group can help you explore what’s possible and present pain free options that can work for you.

Let us know how we can help...comment below and we'll be in touch

We are advising prospective buyers to get serious now as mortgage rates decline and the housing market tilts a little in buyers’ favor. 

The median U.S. home-sale price rose just 3.5% year over year during the four weeks ending February 23, the smallest increase since September. And mortgage rates have declined to their lowest level in more than two months, dropping from 7.13% to 6.78% in the last two weeks and upping buyers’ purchasing power by thousands of dollars. Mortgage rates are coming down due to signals that the U.S. economy is slowing, and heightened recession fears. 

In addition to a bit of cost relief, another factor is working in buyers’ favor. House hunters have a bit more power to negotiate on sale price and terms as supply piles up in some parts of the country. There are 4.6 months of supply on the market, up from 4 months at this time last year, and the typical home is selling for roughly 2% less than its asking price. 

There are signs that slowing price growth, declining rates and more favorable conditions are bringing some house hunters back to the market. Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of tours and other buying services from The DHC Group agents–has jumped to its highest level since the start of the year, and Google searches of “homes for sale in San Diego” has hit their highest level since September. 

But home sales have yet to improve.  Pending home sales are down 6.2% from a year earlier, in line with decreases we’ve seen since the start of the year. Even though mortgage rates have declined a bit, the typical monthly housing payment is just $32 shy of its all-time high. Sales could pick up in the coming weeks if the increase in home tours turns into more offers and/or mortgage rates continue coming down slightly.

Dream Homes agents in some parts of San Diego are advising prospective buyers to jump in while they can because with today’s economic and political uncertainty, mortgage rates could rise above 7% again soon. And the pileup of supply could soon be depleted: New listings of homes for sale are up just 2.4% year over year this week, the smallest gain in a month.  

“My advice to buyers: If you’re thinking of purchasing a home in the next six months, don’t wait until the flowers start blooming,” said Hennin Foreman, The DHC Group lead in San Diego, CA. “The market will heat up as we get closer to spring. Now is the time to potentially negotiate down the price of a home, save money on closing costs or get the sellers to cover issues uncovered in the inspection. There are bidding wars for relatively affordable homes, under $850,000 or so, and for upscale, fully renovated homes in popular neighborhoods. But for everything in between, buyers are looking online and touring, but not jumping on them. The buyers who are jumping are getting deals.”

Bottom Line

With the cost of homeownership so high in Southern California, making the right decision about buying or selling a home can feel like a real challenge. Whether you're downsizing, upsizing, investing or cashing out all together...if you’re open to having the right team put in the work for you, we can get it done.

Hennin Foreman and The DHC Group can help you explore what’s possible and present pain free options that can work for you.

Let us know how we can help...comment below and we'll be in touch

The median monthly housing payment remains near record highs, but slowing price growth, declining mortgage rates and a pileup of supply is giving homebuyers in certain parts of the country room to negotiate.

The median U.S. home-sale price rose 3.7% year over year during the four weeks ending February 16, the smallest increase since September. Additionally, the weekly average mortgage rate dipped to 6.87%, its lowest level of the year. 

While typical monthly housing costs remain near record highs, decelerating price growth and gradually declining rates are among several small pieces of good news for house hunters this week. Here are the others:

• • Homebuyers have more total inventory to choose from. There are five months of supply on the market, up from 4.1 months a year earlier and the most since early 2019 (except the 4 weeks ending January 26, when there were 5.1 months). Supply is piling up because listings are rising while pending home sales are falling. 
  • Buyers have more new inventory to choose from, too. New listings are up 4.2% year over year to their highest level for any comparable time period in three years. 
  • Buyers have more negotiating power. The typical home is selling for 2% less than its asking price, the biggest discount in two years. Additionally, the typical home that sells is taking 57 days to go under contract, the longest span in five years. A slow market in which the typical home is selling under list price means buyers in many markets have the opportunity to negotiate on prices and terms. 

Some markets are more buyer friendly than others. For example, the coastal Florida market is tilting in buyers’ favor, while sellers are generally in the driver’s seat in some West Coast and Northeast markets. Additionally, these conditions may be short-lived as more buyers come off the sidelines. Home-touring activity is rising, according to both ShowingTime data and Google data, and DHC agents in certain areas report that house hunters are gearing up for spring homebuying season. 

“If a home needs work or it’s priced too high, it’s sitting on the market,” said Hennin Foreman, DHC Group agent in San Diego. “That’s when a buyer has bargaining power. But updated homes that are priced right–especially those located in desirable neighborhoods with highly rated schools–are selling quickly, sometimes for tens of thousands of dollars over the asking price. It seems like every buyer is looking for the same type of house.”

Bottom Line

With the cost of homeownership so high in Southern California, making the right decision about buying or selling a home can feel like a real challenge. Whether you're downsizing, upsizing, investing or cashing out all together...if you’re open to having the right team put in the work for you, we can get it done.

Hennin Foreman and The DHC Group can help you explore what’s possible and present pain free options that can work for you.

Let us know how we can help...comment below and we'll be in touch

One in three single-family homes listed for sale in the U.S. housing market had taken a price  cut in January, in what real estate analyst Mike Simonsen described on X, formerly Twitter, as a "very unusual "phenomenon for the first month of the year.

"About 33.1 percent of the homes on the market have taken a price cut from the Original list price. That's up from 33 percent last week," Simonsen, founder and president of real estate analytics firm Altos, wrote in a piece for Housing Wire published on Monday. "It's a pretty small move, but it's in the wrong direction."

Why It Matters

The U.S. housing market is undergoing an affordability crunch triggered by historically low inventory, skyrocketing home prices, and stubbornly high mortgage rates, which are still hovering around the 7 percent mark, despite recent rate cuts by the Federal Reserve.

As aspiring homebuyers remain cautious about getting on the property ladder, sellers across the country are increasingly trying to meet them where they are at, slashing listed prices for their properties. Despite growing inventory and widespread price cuts, home prices are still rising at the national level, giving little respite to buyers.

What To Know

Sellers slashed prices during what is normally considered a busy time of the year for the housing market because of weak demand, Simonsen said. Crushed by high mortgage rates and still-rising prices, buyers are waiting on the sidelines of the market for better times to come, forcing sellers to try to attract them with price reductions.

"Almost always this early in the year, price cuts are declining," Simonsen wrote. "Normally, fewer folks need to cut their prices in the spring. At this time of year, there's new inventory, and new buyers are shopping. In recent weeks, we can see that those buyers are waiting," he added.

"Sellers who don't get an offer may choose to cut their price. So, normally, there would be fewer price reductions at this time of year. But, this week, price reductions ticked up."

Notably, according to Simonsen, this is "the first instance of an uptick in price reductions in January in over 10 years."

Recent data from Realtor.com confirms that an increasing number of homes for sale in the U.S. had their listed price slashed in January. According to the platform, 15.6 percent of listings had price cuts last month, up 14.7 percent compared to January 2024.

The share of price cuts was higher than any January in Realtor.com's records other than in 2023, "when rising rates began to slow the market, and in 2019, when the market was also softer due to relatively higher rates at the time," Realtor.com wrote.

Despite widespread cuts, the median price of the newly pending single-family home sales in the U.S. in January was $389,700, according to Altos data, up 2.5 percent compared to a year earlier. The median price of the active market was $424,900, unchanged from last year, Simonsen reported.

Even though prices are still rising, the pace of their growth has slowed down significantly, Simonsen said. "Any way you slice it, home prices are basically flat from a year ago," he wrote on X.

What Happens Next

According to Realtor.com, the high share of price cuts in the U.S. housing market "could signal further price softening in the coming months." Simonsen expects this trend to continue "until mortgage prices come back down."

Bottom Line

With the cost of homeownership so high in Southern California, making the right decision about selling a home can feel like a real challenge. Whether you're downsizing, upsizing, investing or cashing out all together...if you’re open to having the right team put in the work for you, we can get it done.

Hennin Foreman and The DHC Group can help you explore what’s possible and present pain free options that can work for you.

Let us know how we can help...comment below and we'll be in touch

More house hunters are hitting the pavement as the new year starts, but pending home sales are down as daily average mortgage rates hit a seven-month high. 

More house hunters are starting their home search as the new year kicks off. Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of tours and other buying services from Redfin agents–posted a small 2% increase from a month earlier during the week ending January 5, and it’s also up 2% year over year. 

There are several reasons a few more buyers are out there: Some have accepted high mortgage rates; daily average mortgage rates hit a seven-month high this week and they’re unlikely to decline significantly soon. Some are jumping into the market now that the holidays have passed and a new year has begun, and some are taking advantage of the fact that there are more homes on the market than there have been over the last few years. 

“Three of the four offers my clients have made in the last week have competed against other offers with competitive terms, like waiving all contingencies and releasing earnest money early. Some homes are getting multiple offers within 24 hours of hitting the market,” said Emily Lam, a Redfin Premier agent in the Seattle area. “Some buyers are getting serious about their search because they’ve come to terms with 7% rates and they’re worried that if they wait longer, home prices will just keep rising. Others are starting their search in hopes that rates will decline soon. Either way, I’m advising buyers to get serious now because desirable listings will get more competitive as the year goes on.”

Nationwide, the small increase in tours hasn’t yet translated to an uptick in sales. Pending home sales fell 3.1% from a year earlier during the four weeks ending January 5, though that decline may be artificially large because we’re comparing to a period last year when mortgage rates posted a big drop, bringing a surge in demand.

On the selling side, new listings are down 2.5%, the biggest decline in over a year. But for the reason noted above, that drop may appear larger than it actually is. We’ll keep a close eye on pending sales and new listings over the next few weeks to determine whether more home tours eventually turn into more home sales, and whether more sellers start listing their homes as we get settled into 2025.

Remember, the perfect home is the one you perfect after buying it. By starting with an entry level home, move up or down, you have the opportunity to customize a home to your liking. With careful planning, budgeting, and a little bit of vision, you can turn a house that needs some love into your perfect home. 

The DHC Group in San Diego is great at finding homes in every condition. They know the local market and can guide you to homes where smart upgrades can add value. With their help, you’re more likely to find a house that fits your total budget and has room for worthwhile improvements.

Bottom Line

In today’s market, where the cost of homeownership can be intimidating, finding the right home that fits your budget can feel like a real challenge. But if you’re open to putting in a little work and time, we can get you into your ideal home. Hennin Foreman and The DHC Group can help you explore what’s possible and find a place that’ll work for you.

Let us know how we can help...comment below and we'll be in touch

Late 2024 Openings

Flora (North Park)

Recently opened, Flora offers modern twists on classic dishes in a lively bistro setting. Menu highlights include Matcha Waffles, Shakshuka Eggs, and specialty cocktails like the Lychee Spritz.

Located at 3021 University Ave, Flora is perfect for brunch or a cozy dinner.

Wildland (Carlsbad)

Wildland in Carlsbad Village has opened its doors, bringing rustic cuisine and coastal-inspired dining to North County.

This all-day restaurant, bar, and bakery from Michelin-starred duo Chef Eric Bost and John Resnick celebrates California’s vibrant flavors with a menu rooted in seasonal ingredients and bold, wood-fired techniques.

Tajima (Crown Point)

Beloved ramen spot Tajima expands to Crown Point with its signature Tonkotsu Ramen and Spicy Sesame Ramen. Now open at 3782 Ingraham St., this location also houses a commissary kitchen crafting fresh broths daily.

Wildflour (Liberty Station)

Chef Phillip Esteban brings Wildflour Delicatessen to Liberty Station this December. Expect Scandinavian-inspired bakery vibes with local ingredients, sandwiches, cured meats, and a curated wine list at 2690 Historic Decatur Rd.

2025 Highlights

Odie’s Pizza Co. (Oceanside)

Opening in early 2025, Odie’s serves New York and Sicilian-style pizzas with sourdough crust, salads, and desserts. Located at 121 N. Cleveland Street, it’s a family-friendly spot for pizza lovers.

Madi (Pacific Beach)

Set to open in summer 2025, Madi will bring its California-Mediterranean brunch and diner-style favorites to 910 Grand Ave. Expect dishes like White Bean Shakshuka and Chilaquiles Verdes.

Cherryfish (Pacific Beach)

Arriving in winter 2025, Cherryfish brings elevated Asian fusion to Pacific Beach.

This chic, Japanese-inspired spot blends lush greenery, modern artwork, and VIP private dining options. Just steps from the beach, it’s set to offer top-notch seafood in a stylish, luxurious setting.

The Crack Shack (Pacific Beach)

Known for its crispy chicken and laid-back vibe, The Crack Shack’s newest location at 4525 Mission Blvd. will open in early 2025 with lawn games and signature milkshakes.

Sonny’s (University Heights)

Opening in March 2025, Sonny’s brings NY-style pizza and amaro to University Heights. This wood-fired pizza spot combines nostalgic charm with modern flair, featuring a custom Italian oven, vintage touches, and a cozy backyard dining area.

It’s a neighborhood haunt perfect for enjoying authentic flavors and relaxed vibes.

Le Horse (North Park)

Opening in summer 2025 at The Lafayette, Le Horse brings luxurious European-inspired dining to the hotel, complete with prime rib and martinis.

Stella Jean’s + Pop Pie Co. (South Park)

In February 2025, South Park welcomes the Sweet & Savory Collective’s dynamic duo: Stella Jean’s Ice Cream and Pop Pie Co.

Indulge in globally inspired pies with buttery crusts and small-batch ice cream featuring creative, locally sourced flavors. It’s the perfect pairing of sweet and savory in one charming location!

Yet-to-Be-Named Diner (Hillcrest)

Slated for summer 2025, this diner concept from the team behind Madison on Park will bring nostalgic, classic diner elements to Hillcrest. Expect dishes inspired by a 100-year-old family breakfast tradition with a modern twist at 1270 Cleveland Ave.

Roseacre (La Jolla)

The highly-anticipated dining destination Roseacre is set to open in Spring 2025 at 7766 Girard Avenue. Created by legendary design visionaries Paul Basile and Jules Wilson, this multi-concept space aims to bring a fresh, elevated, yet approachable experience to La Jolla.

With its roots in strong hospitality and innovative design, Roseacre is poised to become a cornerstone of La Jolla’s dining scene.

Far Corner (Gaslamp Quarter)

Far Corner opens in winter 2025 at 410 Tenth Ave., offering housemade pizzas, cocktails, and a stylish lounge perfect for pregame drinks or family dinners.

Baby Grand Hotel Restaurants (Coronado)

Set to open in winter 2025, Baby Grand will feature three exciting concepts, including a champagne and oyster bar, at 1315 Orange Ave.

See you there!

San Diego Restaurant Openings in 2025 promise to bring fresh flavors and innovative concepts to our culinary scene. It’s going to be a great year!

See you there, San Diego!

Homebuyers are reviving a forgotten strategy to secure much lower rates

Prediction 1: Home Prices Will Rise 4% in 2025

We expect the median U.S. home-sale price to rise steadily throughout 2025, ending the year 4% higher than it was in 2024. Prices will rise at a pace similar to that of the second half of 2024  because we don’t expect there to be enough new inventory to meet demand.  Rising prices are one factor that will keep homeownership out of reach for many Americans, leading some would-be homebuyers to rent instead.

Prediction 2: Mortgage Rates Will Remain Near 7%

Mortgage rates are likely to remain in the high-6% range throughout 2025, with the weekly average rate fluctuating throughout the year but averaging  around 6.8%. Investors are anticipating that if President-elect Donald Trump implements a significant portion of his proposed tax cuts and tariffs, and the economy stays strong, the Fed will only cut its policy rate twice in 2025, keeping mortgage rates high. Tariffs could be inflationary, and enacting more tax cuts would increase the U.S. deficit, both of which would push mortgage rates up. High mortgage rates are the second part of the equation that will keep homebuying unaffordable. 

Alternate scenario: Mortgage rates could drop to the low-6% range if the economy weakens and/or if plans for tariffs and tax cuts are dialed back. Any year in which the presidential administration changes is unpredictable, and this one may be especially unpredictable. 

Prediction 3: There Will Be More Home Sales in 2025 Than 2024

We expect existing home sales to tick up next year, ending 2025 at an annualized rate of between 4.1 million and 4.4 million. That represents a year-over-year increase of between 2% and 9%. We’re presenting an unusually wide sales range this year because while high housing costs may price out some would-be buyers, there’s also a fair amount of pent-up demand in the market. 

If sales post just a small increase, it will be because of high mortgage rates and low inventory, as homeowners continue to hang onto their homes. 

Sales may post a bigger increase if mortgage rates decline more than expected, and/or if the recent burst in homebuying demand continues. Homebuying demand jumped in the weeks after the November election despite mortgage rates sitting around 7%. That was partly because buyers were waiting for uncertainty to pass before making a big purchase, and partly because many people felt more financially confident with the promise of a Republican-led administration. Even before the election, our data showed that rising mortgage rates didn’t deter buyers as much as expected, likely in part because many Americans have grown accustomed to high mortgage rates. If the economy stays strong and enough people can afford next year’s high housing costs, that would push up sales. 

Prediction 4: 2025 Will Be a Renter’s Market

Many Americans will remain renters or become renters. While the cost of buying a home will increase, rental affordability will improve. We expect the median U.S. asking rent to remain flat year over year in 2025. That will make rent payments more affordable to the typical American because wages will rise. 

There will also be more new rentals coming on the market, with many of the units builders started working on during the pandemic apartment-building boom coming to fruition. This will create more supply than demand, motivating landlords to offer concessions like free parking, a free month of rent, more amenities or a hiatus on rent increases in order to retain residents. With rents flat or maybe even down next year, and home prices rising as rates are likely to stay high, the affordability gap between renting and buying may widen. 

Prediction 5: Fewer Construction Regulations Will Lead to More Homebuilding

We expect homebuilders to construct more single-family homes in 2025, though it will take a few years for the increase in homebuilding to make buying a house significantly more affordable. The Republican sweep of the White House, Senate and House has improved builder confidence by bringing renewed optimism that regulatory burdens may ease. Builders will also bank on the fact that the mortgage-rate lock-in effect will put a lid on the amount of existing inventory competing with new builds.

Easing regulations should also lead to a rebound in multifamily housing starts. That will be a reversal from 2024, when builders pulled back on apartment starts because of the glut of supply.

The caveat is that there are a few headwinds for builders. One, interest rates are likely to stay high. Two, the incoming administration has said it will cut back on immigration, which would likely lead to less residential construction, as immigrants make up about 30% of the country’s construction work force. 

Prediction 6: The Real Estate Industry Will Consolidate

Under the new administration, the Federal Trade Commission will be more likely to approve mergers and acquisitions among large companies. Unlike other industries with a few dominant players, the U.S. real estate industry has long been fragmented with multiple real estate search sites and brokerages of all sizes and business models competing for agents and customers. While it’s not uncommon for larger brokerages to have affiliated mortgage or title services, we’re likely to see more roll-ups of brokerages, lenders and title companies looking to generate more business from every customer. 

Prediction 7: Mayors in Blue Cities Will Help Reverse the Flight From Urban Centers

San Francisco elected a pro-business Democrat as its new mayor this year, Portland, OR elected a mayor who pledged to end unsheltered homelessness, and several other big cities in blue states are enacting tough-on-crime policies to revive their downtowns and retain residents. Those political factors, along with many big companies–including tech firms–bringing their workers back into the office, may start a reversal of the flight from big coastal cities. 

We expect that to be especially true in California. Many Golden State residents will be motivated to stay because housing supply will continue to improve, curbing price growth; specifically, the ADU building boom in places like Los Angeles and the Bay Area should continue to provide more housing. Additionally, it no longer makes as much sense to chase housing affordability in the desert, as home prices in places like Phoenix and Las Vegas have gotten higher while climates have gotten hotter. Self-driving cars will start to become more common under the new administration, making more parts of California more livable. Urban areas like San Francisco and downtown Los Angeles will become more attractive as self-driving ride-hailing apps and buses are approved, and exurbs will be more appealing because personal autonomous cars will improve commutes.

Prediction 8: Gen Z Will Rewrite the American Dream, Cutting Homeownership From the Script

We expect lower-priced homes to boom in 2025 compared to higher-priced homes, but that won’t be because young Americans or working-class people are breaking into homeownership. Instead, affordable homes will be snapped up by older buyers who are priced out of higher price tiers. Gen Zers, meanwhile, will keep living with family or renting until well into their 30s, opting to build wealth in other ways. 

Through the third quarter, sales of existing homes were tracking below last year's levels. Forecasters were optimistic for a strong 2024, but higher-for-longer mortgage rates and affordability challenges have subdued transactions. However, new pending sales were strong this fall, so it is possible that 2024 will end with more sales than last year.

But how strong of a fourth quarter do we need?

The numbers

According to the most recent numbers available from the National Association of Realtors, there have been 3.42 million existing home sales on a seasonally unadjusted basis (reflecting the raw number of sales each month) through October. The pace of home sales year-to-date in 2024 is running about 2% below 2023 levels.

Over the past 10 years, sales during the first three quarters of the year accounted for about 70% of total annual sales, and fourth-quarter sales accounted for 30%. In order to achieve levels equivalent to 2023, we would need to see about 1.02 million home sales between October and December. Fourth-quarter sales of that magnitude would be a 9% bump over the same period in 2023.

The explanation

At this time last year, all signs pointed to a busy housing market in 2024. Mortgage rates were projected to fall, and buyers who had been waiting on the sidelines were going to be out in full force.

But 2024 has ended up a disappointment so far. What went wrong?

The Federal Reserve delayed interest rate cuts. While inflation had been easing, progress stalled in early 2024. By the summer, inflation was still at or above three percent, and the Fed had still not cut interest rates. The Fed did not cut interest rates until September, and by then it was too late to give much of a jolt to the housing market.

Strong economic conditions and political uncertainty led to rising mortgage rates. Following the Fed rate cut in September, mortgage rates actually rose instead of falling, due to the strong economy and uncertainty around the presidential election. Buyers who were waiting for rates to come down in the fall were disappointed, and many decided to wait longer.

Rate lock kept sellers out of the market. Record-low mortgage rates during the pandemic enticed millions of people to buy homes and refinance existing mortgages. But when mortgage rates rose, the gap between the rate a new borrower could get and the average rate held by a current mortgage holder widened. Homeowners who might have wanted to sell their home were "locked" in place by their much lower rate, keeping inventory and sales lower.

Affordability was a major constraint in 2024. Record-high home prices and rising mortgage rates increased affordability challenges, particularly among first-time and moderate-income buyers. Even with a dip in interest rates, many prospective buyers were still priced out, which kept home sales activity low.

It is still possible that overall home sales in 2024 will match — or even exceed — 2023 levels. The number of pending sales in September was up a robust 7.4% nationally. Local markets have seen an even bigger bump. Across the Mid-Atlantic, new pending sales were up almost 9% year-over-year in October.

When those new contracts convert to closed sales, we could end the year with strong sales activity. But a drop in mortgage rates in the last few weeks of the year may be what's needed to push 2024 totals over the threshold.

If you're thinking about making a move, feel free to contact us below. We're happy to look at your options with you.