2024 Real Estate Trends: What Military Members Need to Know
Military members buying, selling, or renting homes had much to contend with in 2023. Frustration stuck around all year, thanks to a combination of high interest and rent rates against the back drop of the persistent housing shortage.
It should also be noted that a new post-pandemic trend has solidified and made housing choices more difficult for military members. They now compete with more civilians for real estate in affordable cities near or adjacent to military installations, especially in Texas.
What can military families expect if they're looking to buy, sell, or rent a home in 2024?
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Mixed Real Estate Forecasts in 2024
This year, real estate professionals and industry researchers all seem to agree that the highest interest rates were left behind in 2023, but they somewhat disagree about how rosy the overall 2024 real estate outlook seems. Home prices remain high while inventory stays low, and inflation is a serious question mark.
As the PCS season ramps up, military members should plug into the real estate market news in their potential new locations to help them make buying, selling, and renting choices. Although every local market is different, there are some big trends that military members should be aware of and plan accordingly.
Take a look at what military home buyers, sellers, and renters should expect in 2024.
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Military Home Buyers
Military members buying a home will encounter both favorable and unfavorable buying conditions as the 2024 PCS season approaches. The housing inventory will slightly increase, but not enough to meet continuous demand. As a result, NAR projects that existing home sales will rise by 13.5% by the end of the year.
Mortgage rates are finally dropping, and NAR estimates an average of 6.3% by the year’s end; however, other real estate professionals predict rates closer to 5%. Of course, the decrease improves affordability, but military home buyers should prepare for more competition.
Lower interest rates attract more buyers, so military buyers must act fast and put their best offer forward. Now is the time to clean up credit report errors and consider obtaining pre-approvals from mortgage lenders.
Breaking into the market might be trickier for first-time military buyers without the cushion of previous home sale proceeds. Exploring government finance programs like VA and FHA loans might close the affordability gap thanks to the zero down payment and zero private mortgage insurance options.
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Military Home Sellers
Home price appreciation has jumped by about 5% over the past year, and the typical homeowner has accumulated about $100,000 in housing wealth over the past three years. As a result, military home sellers are in an enviable position if facing a move this PCS season because they’ll have flexibility when deciding their next housing option.
If military home sellers were fortunate enough to have locked in a low interest rate during the 2 to 3% era, they would need to evaluate if selling their home makes financial sense. Buying another home with current interest rates will not likely match their previous numbers.
Some owners may decide to become a landlord instead of selling. This is a solid financial decision if they want to eventually return to their house or use their property as an investment. Although they would hold onto their stellar interest rates, military homeowners should calculate the new costs involved with rental properties, like property management services and increased homeowners insurance.
Military homeowners should strategically time their listing if selling is unavoidable. Early in the PCS season, there will be buyer activity to capitalize on, especially if properties are move in ready. Late spring and summer usually increase buyer activity, potentially fetching a better price.
Learn More: Should I Sell My Home or Rent It Out?
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Military renters will also encounter mixed real estate trends this year, continuing to pay high rent for single-family homes, often competing with potential buyers who find themselves priced out of the buying the market.
An option to combat low inventory and high prices is exploring new apartments and condos. They may offer a more affordable solution, especially when developers provide discounts and amenities due to excess supply.
Another way to offset the shortage of attractive rentals is to begin your rental search early. Fellow military members may be willing to network with incoming renters to coordinate vacancies and moving timelines. It's not uncommon for the best rental homes to pass continuously from military family to military family year after year.
Texas Hill Country near Fort Cavazos. Photo from iStock.com/Amy Sparwasser
Military Town Trends
Military towns, like those surrounding bases like Fort Cavazos (formerly Fort Hood) in Killeen, Texas, often offer enticing home buying and home selling choices. The affordability and growth in these areas are enticing for military members, especially considering the perpetual influx of new families and the potential for continued community development.
Affordability and growth are great for military buyers, sellers, and renters, but non-military competitors also find these qualities attractive and will put more pressure on home finders throughout the PCS season.
NAR recently identified real estate markets across the country with the most pent-up demand. Several are directly related to military installation locations. (Source)
- Austin-Round Rock-Georgetown, TX
- Dallas-Fort Worth-Arlington, TX
- Dayton-Kettering, OH
- Durham-Chapel Hill, NC
- Harrisburg-Carlisle, PA
- Houston-The Woodlands-Sugar Land, TX
- Nashville-Davidson–Murfreesboro–Franklin, TN
- Philadelphia-Camden-Wilmington, PA, NJ, DE
- Portland-South Portland, ME
- Washington-Arlington-Alexandria, DC, VA, MD
In comparison, Go Banking Rates recently revealed its 25 Most Affordable, Fast-Growing Cities. The top ranked cities are also near military bases.
The real estate landscape appears to be stabilizing after the last years’ tumultuous experiences. Projections from a range of real estate professionals suggest a somewhat positive turnaround, with mortgage rates expected to ease and home sales on the rise. However, the lack of housing inventory remains problematic, and the inflation rate remains a wild card.
Military members know that housing is a tall hurdle in every PCS cycle, whether buying, selling, or renting. It’s essential to navigate real estate in 2024 with personal research and support from knowledgeable and military-friendly real estate pros, including agents, mortgage lenders, and other supporting professionals.
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