By Julie Taylor
Sep 12, 2024
Mortgage rates tumbled from 6.35% to 6.20% for a 30-year fixed home loan for the week ending Sept. 12, according to Freddie Mac.
“Mortgage rates have fallen more than half a percent over the last six weeks and are at their lowest level since February 2023,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Rates continue to soften due to incoming economic data that is more sedate.”
For the past two weeks, rates lingered at their lowest point in more than a year before this week’s further downturn. Yet despite the rate decline, the U.S. housing market remains sluggish—but perhaps not for long.
“We anticipate the marginal buyer will decide to enter the market in the coming months to take advantage of these favorable conditions,” says Realtor.com® senior economist Ralph McLaughlin in his recent analysis.
However, other buyers ready to make a move might want to make a move sooner.
“Seasonal market dynamics suggest that this year’s Best Time To Buy is Sept. 29 to Oct. 5,” according to Realtor.com senior economic research analyst Hannah Jones.
With those dates quickly approaching, here’s a snapshot of the latest housing market data and what it means for homebuyers and sellers in our latest “Weekly Housing Market Update.”
Mortgage rate countdown
After years of soaring mortgage rates, relief could finally arrive soon. Market watchers and economists alike believe the Federal Reserve will finally cut rates at its next policy meeting on Sept. 17–18. Indeed, Chair Jerome Powell himself has indicated that rate cuts are likely.
“Cooling employment and inflation both came in near their anticipated levels, solidifying the Fed’s path toward a rate cut in next week’s meeting,” according to Jones.
While the Fed doesn’t set mortgage rates, the two numbers often move in the same direction—and the anticipated rate cut is expected to give the real estate market a much-needed boost.
Homebuyers have long faced affordability headwinds, but “more favorable housing conditions may be ahead,” says Jones.
Home prices continue to drop
Falling mortgage rates are not the only boon for buyers this fall—homes prices are finally cooling, too.
“With the mortgage rate side of affordability starting to improve, many buyers hope to see prices do the same,” says McLaughlin.
Prices did just that the week ending Sept. 7, with median list prices falling 0.3% year over year. (In August, the national median list price was $429,990.)
Not only has the median list price in the U.S. been less than or equal to what it was in the corresponding week of 2023—price reductions are up as well.
“Sellers are adjusting prices to encourage activity on their listings, with the number of listings with price cuts growing by 33% compared to the same time last year,” says McLaughlin.
The number of homes for sale increases
Adding to the trifecta of good news for homebuyers is rising housing stock.
The total number of houses for sale spiked by an astounding 33.4% for the week ending Sept. 7, compared with the same time last year.
The market also saw an uptick of fresh listings, with 9.9% more homes hitting the market for the week ending Sept. 7. compared with last year.
Just how long has housing stock been rising? This marks a streak of 44 weeks in a row that the number of for-sale homes has increased—catapulting the housing supply to its highest level since May 2020.
However, McLaughlin cautions that “it’s important to note that much of the increase in inventory is due to listings accumulating on a slow market rather than a surge in new listings.” Houses are lingering on the market
Buyers looking for one last sign that now might be the time to jump into the market have one: They have more time to make a decision when making an offer.
Houses spent eight days longer on the market than they did at the same time last year during the week ending Sept. 7. Last month, the typical home spent 53 days on the market, which was the slowest August in five years.
With so many more options available and lower mortgage rates on the horizon, buyers feel less pressure to act quickly.
“Homes are moving significantly slower as buyers take advantage of a more forgiving and flexible market,” says McLaughlin.
Bình luận