I'm Buying a House in 2024. Am I Doomed?

I've been watching the housing market since early 2022, when I decided that homeownership was something I wanted to do again. Originally, it was my intention to attempt it this year, but after I got a better handle on my finances and started watching mortgage rates climb, I decided that I'd hold off until 2024.

I'm not regretting that decision -- buying and owning a home is expensive, and since my first attempt at homeownership ended poorly, I have a lot to prove to myself this time. But all of this raises the question: If I'm buying a home in 2024, am I doomed? No -- and here's why.

I'll pay more for a mortgage...

Buying a home in 2024 is going to mean paying more money for a mortgage loan. Back at the beginning of 2022, the average rate for a 30-year fixed loan was 3.22%, according to data from Freddie Mac. As of this writing, that figure sits at 7.5%. This is a big difference, and it will serve to make my eventual mortgage payments significantly more expensive.

I ran some realistic numbers for home prices, homeowners insurance, and property taxes for my home search through The Ascent's mortgage calculator, changing only the mortgage rate. (Note that this is based on buying a $225,000 home with a 10% down payment, so private mortgage insurance (PMI) is also included.) Here's the difference between what I could have paid monthly in early 2022 and what I would likely pay now.

This table doesn't tell the whole story, though. I have no way of predicting what mortgage rate I'll be facing next year. Some of the biggest names in the mortgage market have ideas, though. For example, Fannie Mae's October Housing Forecast predicts mortgage rates above 7% until the third quarter of 2024, and then a drop to 6.9%. Since I intend to buy in the first half of 2024, I'm likely still looking at a rate of at least 7%. I'm still not doomed, though.

...but my finances are in good shape

I'm definitely not thrilled at the prospect of a 7% (or higher) mortgage rate in 2024. But as you saw above, I've crunched the numbers for myself. I know how much I'm comfortable paying per month, and even though a higher rate will make my monthly mortgage payment more expensive, I can still handle it.

Having a firm dollar figure in mind, and being unwilling to commit to a larger payment, means I am less likely to end up house poor. House poor is when all your money is going to your home, leaving you nothing left for leisure spending or achieving other financial goals, like investing for retirement -- you don't want this.

Plus, when I do buy, I intend to leave a solid chunk of money in my savings account to serve as my emergency fund. This means that if something breaks, I can pay for it without resorting to debt.

Should you buy a home in 2024?

If you've been flirting with the idea of buying a home next year, you might be reluctant to commit based on the current state of the market -- and an uncertain future. I absolutely get it. But the prospect of buying a home of your very own is a pretty great one. So here's what to consider if you're in the same boat as me.

• Get a handle on your finances: This is the most important part of the puzzle. Look at your credit and income and decide how much you can spend per month -- and how much you want to spend (as those are likely two different numbers).
• Shop around for a mortgage: Yes, rates stink. But you have a better shot at getting the best one possible if you talk to a range of mortgage lenders.
• Save money: If you're seriously pondering buying in 2024, you might already have money for a down payment and closing costs -- I do, and I'm still saving. But given the state of the market, the more you have, the better. Keep saving with me.
• Connect with your local market: Now is the time to drive around to scout neighborhoods and check prices on Zillow or other home listing sites. Also, start putting out feelers for a good real estate agent, as they will be your biggest ally in this process.

I might not be doomed because I want to buy a house next year, but that doesn't mean I'm guaranteed smooth sailing in the process. Thankfully, taking the time to think through every angle now means I'll go into 2024 in the best possible position. If you're going on this journey with me, make sure you do the same.