Mortgage & Housing Update 9/28/2024

Mortgage & Housing Update 9/28/2024

With mortgage rates down sharply in the last 5 months, refinancing is already up big. But we have yet to see those lower rates translate to increased homebuyer demand. By the way, this is historically the best week to buy a home!

Mortgage rates edged higher. That’s right, average 30-yr mortgage rates are 11 bps higher than they were BEFORE the Fed cut rates 50 basis points. If you find this confusing, you’re not alone. But I promise that this did not come as a surprise. Mortgage rates are forward looking, so the rates cuts are already priced in long before the Fed makes it official.

Price growth eases. In July, the Case-Shiller national home price index rose just 0.2% month-over-month. After 47% cumulative home price growth during 2020-2023, we expected supply and demand to become more balanced. But there seems to be a huge divergence in price action by city or region. Some cities have continued to see price increases, while others are stuck below their 2022 peaks.  [Source: S&P DJI]

Sales slow to react

Mortgage rates have fallen 130 bps (1.3%) in the last 5 months, but NAR’s Pending Home Sales Index (PHSI) has barely budged. The PHSI, which measures signed contracts for existing homes, rose just 0.6% MoM in August. Consider this: the PHSI today is 4% BELOW where it was in October 2023 - when 30-yr mortgage rates were nearly 2% higher at 8%! [Source: NAR]

Typically, when mortgage rates jump, the PHSI falls and vice versa. But we are not seeing this yet. Are buyers holding off in the hopes of even lower rates, are they nervous about the economy, or waiting for post-election? It's too soon to tell.

According to analysis from Redfin, 48% of US listings have been on the market for 60 days or more, the highest percentage of “extra stale” listings since 2019. 

Best week to buy a home?

According to Realtor.com, the week of Sep 29-Oct 5 is the best time to buy a home. This week offers the best combination of rising inventory (more homes to choose from) and reduced competition (fewer bidding wars). In other words, a better chance to find a home you love at a (more) reasonable price. As chance would have it, mortgage rates have dropped just in time. 

Thanks for tuning in to my Mortgage & Housing Update. [source: List Reports] 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 | pauline@indmortgage.com | (617) 965-1988 x205 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.