2024 has been a year of fluctuating trends and changing dynamics in the housing market. With the impact of higher mortgage rates creating a unique inventory buffer, the real estate landscape has seen some interesting developments. Let’s delve into the key takeaways from this year so far.
Weekly Housing Inventory Data:
- While my projections for inventory growth have been largely accurate when mortgage rates were above 7%, recent rate decreases have caused some deviations. However, the slight decline in inventory last week indicates a potential shift in the market.
- 2024 marks a positive turn from historically low inventory levels, offering hope for a more balanced housing market in the future.
New Listings Data:
- An interesting trend in 2024 is the decline in new listings, making it the second-lowest recorded year in history. This decreasing supply could impact pricing and demand in the coming months.
Price-Cut Percentage:
- The rise in mortgage rates has led to an increase in price cuts, with inventory levels playing a crucial role in this trend. As rates have fallen recently, the pace of price cuts has slowed down.
Weekly Pending Sales:
- Real-time demand, as indicated by pending contract data, shows no significant growth week-to-week. However, there is a noticeable gap in year-over-year data, hinting at potential changes in the market landscape.
10-Year Yield and Mortgage Rates:
- Despite the resilience of the 3.80% level in mortgage rates, economic weaknesses could eventually lead to a break in this trend. The current stability in the mortgage market reflects a cautious optimism for the future.
Mortgage Spreads:
- The improvement in mortgage spreads in 2024, compared to the crisis-ridden 2023, offers some respite for the housing market. With the Federal Reserve contemplating rate cuts, these spreads are expected to further improve.
Purchase Application Data:
- Despite fluctuations in purchase applications, recent rate declines have shown positive growth in this area. However, sustained growth in existing home sales may require rates to dip below 6%, presenting a challenge for the market.
In conclusion, as we approach the end of 2024, economic data remains a crucial factor in shaping the housing market. Paying close attention to upcoming job reports and Fed meetings will provide valuable insights into the future trajectory of mortgage rates. While rates have fallen significantly, the focus now shifts to economic indicators for further guidance. As we navigate the complexities of the real estate landscape, adapting to changing market conditions will be key in ensuring a stable housing market moving forward.
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