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A Housing Market Update to Kick Off 2024!



a dog in a box

Happy New Year! There’s no better way to kick off 2024 than with an update on the housing market. So let’s get to it!


A good indicator of the housing market is the Pending Home Sales Index (PHSI), which is based on the pending sales of existing homes. 


A sale is noted as pending when the contract has been signed but the transaction hasn’t closed. Note that home sales are typically finalized in one to two months of signing. The length of the home buying process varies due to issues like buyer difficulties with mortgage financing, appraisal concerns, or home inspection problems.


It may surprise you to learn that pending home sales in November were identical to those in October, with a majority of the country experiencing a gain in transactions. Despite this month-to-month similarity, there was a year-over-year decline of 5.2 percent across the United States. Note that this data is the latest available; pending home sales in December will be released later this month.


Despite this overall decline in pending sales, the National Association of Realtors (NAR) notes that there was "a surge in interest” in home buying.


An increase in lock box openings supports this conclusion. Economists attribute the increase in potential homebuyers to the dropping mortgage rate, which went from a 23-year high of 7.8 percent in late October to 6.6 percent. This latest decrease in rates equates to about 400 dollars in savings per month for customers, bringing the average mortgage down to a 12-month low of $2,361.00. Although it didn’t lead to an increase in offers or contracts (yet!), it looks like things are trending in the right direction. 


Further supporting this finding, RedFin recently published a report that revealed a 10 percent jump in homebuyer demand — leading to the highest level of interest since August 2023. Even so, mortgage rates are still high compared to historic levels. A rate of 6 percent seems reasonable when considering recent numbers, whereas a few years ago, it would’ve been incredibly high (2021 began with a drop to 2.65 percent on a 30-year fixed-rate mortgage — the lowest level in 50 years!). 


Fortunately, home sellers are still getting great prices too. 


Data indicates that we’ve experienced nine straight months of an increase in the average home cost, with prices continuing to sit a bit higher than the peak in 2022. As Freddie Mac’s chief economist notes, “Heading into the new year, the economy remains on firm ground with solid growth, a tight labor market, decelerating inflation, and a nascent rebound in the housing market.”



Let The Urban Dog Group help you with your real estate needs. Contact Christine Elias at caerealestate@gmail.com.

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