Market Update, November 14, 2024

Everyone’s trying to predict what will happen with the housing market under the next president. We admit, we don’t know what will happen.

We do know that back in June, according to Bankrate, “More than half of homeowners (52 percent) say they would need a mortgage rate lower than 6 percent to feel comfortable buying this year. Today’s mortgage rates feel high. Just 2 percent of homeowners say they would be comfortable purchasing a home this year at a mortgage rate of 6 percent or higher.”

Mortgage rates were last below 6% in February 2023. If prices come down and buyers get used to these higher rates, they could return before rates are under 6%.

The same Bankrate survey says, “Homeowners don’t feel motivated to sell. A mere 5 percent of homeowners say they would be comfortable selling their home this year with mortgage rates at 6 percent or higher.”

Today, the average rate for a 30-year fixed-rate mortgage is 7.02%, so sales are likely to stay about where they are for the rest of the year. Mortgage rates look to the future. With the Fed indicating they may pause rate cuts, we don’t expect mortgage rates to fall quickly.

The inventory of homes for sale increased steadily from January through August but has been falling since then.

We’re still in a seller’s market, but it’s different from a couple of years ago. From November 2021 through March 2022, we had a month or less of inventory. That means all the homes for sale could have sold in a month or less if no other homes came onto the market. In September of this year, it would have taken 3.8 months for all the homes on the market to sell; last month, that number was down to 3.5 months. A balanced market is when we have about six months of supply. Anything less than that, and the market favors sellers. It’s a buyer’s market when we have six or more months of inventory.