Housing Market Outlook for Year-End: What 55+ Homebuyers Need To Know

5 minute read

As we round out another year in the housing industry, there have been some ups and downs in mortgage rates, home inventory, and even home prices. Reviewing the last year will give us a good idea of what we can expect for 2024. 

Mortgage Rates for 2023

With the rates dropping in January of this year, we saw a gradual increase through the summer and early fall. For the last few months, rates have been gradually going down again. And the biggest decrease occurred in the last few weeks. In December, rates averaged approximately 7%.

This last decline has removed a whole percent from mortgage rates, and it seems like this trend may continue. We may even see the rates get down to 6.5% by the first of January. 

Home Inventory

Overall, the shortage of homes available seems to have recovered in 2023, with many new construction homes on the market. Areas with limited new construction, however, did seem to have enough pre-built homes available for homebuyers who were looking. 

Areas that were in high demand for 55+ homebuyers are still seeing new construction homes on the market each month. Also, many of these homes are being built in 55+ communities. 

Home Prices

The home prices of 2023 stayed pretty consistent, but they have started to see a small decrease over the last six weeks along with the mortgage rate. These home prices are only dropping about 5%. Since the home inventory is still pretty consistent with the demand, we do not expect the prices to continue to drop.

If there becomes an overabundance of homes due to new construction in 2024, you could see the prices continue to trend down. This is a good sign for home sellers right now who are looking to list their properties in the next few weeks. 

What 55+ Homebuyers Need to Know Ahead of 2024

Moving into the new year with these housing trends means that 55+ homebuyers need to be aware of a few things regarding down payments, budgets, and maintaining a good credit score. 

Down Payment

The traditional loan programs are still requiring 10-20% down to get a manageable mortgage. However, as new programs become available in 2024, the need for such a high down payment could be scaled back. Until you’re eligible for one of these programs, make sure you keep at least 10% in your savings for a down payment. 

Budget Preparation

The holidays can do some damage to your budget. If you went over 30% on your credit cards, you’ll want to work on paying those down and getting your budget organized before putting in your mortgage application. 

If you have a small personal loan amount left to be financed, see about paying it off early. This will improve your monthly budget and allow you to add that payment amount to your savings for a down payment and closing costs. 

Credit Score Maintenance

That 30% debt-to-income ratio isn’t the only thing that can bring down the credit score you’ve worked hard to maintain. Every large purchase you make will have hard inquiries and increase your monthly expenses. Your credit score should stay above 650, and these inquiries can pull it down by 10 or more points with each hit. 

Many credit card companies are approving credit limit requests, so if your card hasn’t had one in a while, it doesn’t impact your score to see if you’re eligible. A higher credit limit will make your utilization smaller and improve your overall credit score.

Assistance Options Available for 55+ Homebuyers

Some assistance options will be available for 55+ homebuyers in 2024. Some of these programs focus on helping with down payments so you can purchase a home to fit your needs. 

DPA One From FreddieMac

One of the newest programs on the market for 55+ homebuyers is the DPA One program available to assist homebuyers in certain states with options to purchase a mortgage with a lower down payment. This program partners with agencies in different states to offer these resources to homebuyers in these areas. Many 55+ homebuyers qualify due to fixed income rates. The states that are currently eligible include: 

• Alabama
• Arkansas
• Arizona
• California
• Colorado
• Connecticut
• Idaho
• Illinois
• Iowa
• Massachusetts
• Minnesota
• New Mexico
• South Dakota
• Tennessee
• Virginia
• Washington

When you apply for a FreddieMac mortgage, your information will be compared to these state resources to determine your eligibility and help improve your approval rating. 

Government Grants

55+ homebuyers may not know that there are government grants available for first-time homebuyers. These grants focus on helping with the following:

• Seniors on a fixed Social Security or Disability income
• Women aged 55+ who have never owned a home

These programs are sponsored through the HUD’s American Dream Downpayment Initiative where eligible applicants receive up to $10,000 to help with the closing costs of the mortgage or apply to the down payment. 

If you’re in good health and willing to put in the labor for your home, the Self-Help Homeownership Opportunity Program requires the homeowner to put in approximately 100 hours towards the building and construction of the new home. This is considered sweat equity, and those who are eligible will be able to use the grant funds towards the overall purchase of the home.

We Have Additional Resources

If you would like more information on 55+ homebuying, feel free to contact us at 55places.com today. We have a variety of resources available to help you with the next step in the homebuying process.