Mortgage & Housing Update 7/28/2024

Homebuyers seem to be holding their breath, hoping that the Fed begins cutting rates soon. Transaction volumes have remained subdued this spring/summer home buying season. There is a silver lining to this shift. With inventory rising and price growth slowing, markets are becoming more balanced, and buyers are regaining some negotiating power. 

The peak of the real estate selling season is done. After June, inventory tends to build, there are fewer bidding wars, and a smaller percentage of homes sell for more than their listing price. Seasonality does explain the charts. But it’s worth noting that competition levels are much lower than they were during the pandemic housing boom, and a bit lower than same time last year. 

Existing home sales falling: Sales of Existing homes fell 5.4% month-over-month (5.4% year-over-year) to roughly 4 million units on an annualized basis. The last time that transaction volumes were this low was 2008! However, the median sales price rose 1.8% MoM to $426,900 - a new record (source: NAR). 

Homes are lingering a bit longer on the market. Days on Market was 22 in June 2024, down from 24 in May 2024, but up from 187 in June 2023. The chart suggests that we should begin to see homes lingering longer, in the coming months. 

Bidding is not as competitive, measured by Average Number of Offers Received per Sale. The average home sold in June 2024 had 2.9 offers, up slightly from 2.8 in May 2024, but down from 3.5 in June 2023. Remember that this is a national average: some areas 5+ offers, in others just 1. 

Price growth in 2024 is already cooler than 2023. 29% of homes sold in June 2024 transacted above their initial listing price. That was down from 30% in May 2024 and 33% in June 2023. 

Mortgage Market: Average 30-yr mortgage rates spent their second week below 7%. The decline, while certainly welcome, has so far failed to boost home sales. Overall, the market is looking for 50-75 basis points of rate cuts before year-end 2024. And when the cuts come, mortgage rates will move lower as well, which could lead to a fall/winter surge in buying activity. (Source: CME, Mortgage News Daily)

Thanks for tuning in to my Mortgage & Housing Update. My name is Pauline Lee. I am a real estate professional, with an expertise in financing. Connect with me for a consultation and to get mortgage ready. I encourage you to get pre-approved.

Pauline Lee, Licensed MLO nmls# 674113

IND Mortgage LLC, #mortgagebroker licenses MA MB1785067, NH 25686-MBR, RI 20223376LB, FL MBR5005

pauline@indmortgage.com | (617) 965-1988 | www.indmortgage.com

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