Mid-Year Market Update for 2024:
What Buyers and Sellers Need to Know
Last December, when the Federal Reserve projected a series of benchmark rate cuts in the coming year, some analysts speculated that mortgage rates - which had recently peaked near 8% - would fall closer to 6% by mid-2024. Unfortunately, persistent inflation has delayed the central bank’s timeline and kept the average 30-year mortgage rate hovering around 7% so far this year.
Fortunately, there have been some positive developments for frustrated homebuyers. Nationwide, the inventory shortage is starting to ease, and an uptick in starter homes coming on the market has helped to slow the median home price growth rate. There are also signs that sellers are adjusting to the higher rate environment, as a growing number list their properties for sale.
What does it all mean for you? Get a sneak peek into what analysts predict is around the corner for 2024.
MORTGAGE RATE CUTS WILL TAKE LONGER THAN EXPECTED
At its May meeting, the Federal Reserve announced that it would keep its overnight rate at a 23-year high in response to the latest, still-elevated inflation numbers. Experts now speculate that the first benchmark rate cut will come no sooner than September. While mortgage rates aren’t directly tied to the federal funds rate, they do tend to move in tandem. So, homebuyers hoping for a cheaper mortgage will have to remain patient.
What does it mean for you? Mortgage rates aren’t expected to fall significantly any time soon, but that doesn’t necessarily mean you should wait to buy a home. Reach out to schedule a consultation so I can help you chart the best course for your home purchase or sale.
BUYERS ARE GAINING OPTIONS AS SELLERS RETURN TO THE MARKET
There is a silver lining for buyers who have struggled to find the right property: More Americans are sticking a for-sale in their yard. Given the record-low inventory levels of the past few years, this presents an opportunity for buyers to find a place they love - and potentially score a better deal. However, the current stock of available homes still falls short of pre-pandemic norms. According to Realtor.com: “While inventory this April is much improved compared with the previous three years, it is still down 35.9% compared with typical 2017 to 2019 levels.”
What does it mean for you? If you’re hoping to sell this year, you may want to act quickly. If inventory levels grow, it will become more challenging for your home to stand out. Contact me for a consultation and home value assessment.
HOME PRICES ARE RISING AT A MORE MANAGEABLE PACE
Homebuyers have something else to celebrate. The national median home price has remained relatively stable over the past year, due to sellers bringing a greater share of smaller, more affordable homes to the market. Dr. Selma Hepp, chief economist for CoreLogic, projects that home prices will keep rising at a gradual pace. “More inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check.”
What does it mean for you? An increase in more-affordable housing stock is great news for first-time buyers. And with home values expected to keep rising, an investment in real estate could help you build wealth over time. I can help you decide if you’re ready to take the leap.
DESIRE TO OWN PERSISTS, BUT AFFORDABILITY REMAINS AN OBSTACLE
Surveys show that the American dream of homeownership is alive and well, despite the financial challenges. In fact, a recent poll by Realtor.com found that 55% of Millennial and 40% of Gen Z respondents believe that now is a good time to buy a home. It also revealed that even a small drop in mortgage rates could give a big boost to homebuyer demand and affordability. For example, 40% of the buyers polled would find a home purchase attainable if rates fall under 6%, and an additional 32% plan to enter the market if rates dip below 5%.
What does it mean for you? I can help you evaluate your purchase options and connect you with a mortgage professional to discuss strategies that can make your monthly payments more affordable. And remember, in many cases, you can refinance if rates drop in the future.
I’M HERE TO GUIDE YOU
While national housing reports can give you a “big picture” outlook, much of real estate is local. As local market experts, I know what's most likely to impact sales and drive home values in your particular neighborhood. If you’re considering buying or selling a home in 2024, contact me now to schedule a consultation.
*The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
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