In the latter half of 2024, the outlook for the U.S. housing market remains mixed among experts. Glenn Kelman, CEO of Redfin, optimistically noted on CNBC that the market had reached its lowest point in the first quarter and anticipates some improvement moving forward. However, Jeff Ostrowski from Bankrate.com described the market as unpredictable and unusual.
A notable trend is the increase in home listings, partially due to the easing of the mortgage rate lock-in effect, which had previously deterred homeowners from selling due to higher current mortgage rates. According to Realtor.com, the week ending June 1 saw a 2.1% increase in new listings and a 35.5% rise in available inventory compared to the previous year.
Despite these increases, the supply boost hasn’t been sufficient to meet the high demand, exacerbated by affordability challenges which may slow the conversion of listings to sales, as noted by Doug Duncan of Fannie Mae. While mortgage rates have recently decreased slightly, with the 30-year fixed-rate mortgage dropping to 6.99% as of early June, this decrease hasn’t significantly spurred buyer activity.
Looking ahead, some anticipate that the Federal Reserve may lower interest rates by fall, potentially reducing mortgage rates to around 6.5% by the year’s end. Yet, any relief might be offset by rising home prices, which continue to climb, diminishing the impact of lower interest rates on overall affordability. Ostrowski remains skeptical about any national decrease in home prices, predicting that the market could even see record highs this summer.
In summary, while more homes are coming onto the market and mortgage rates are showing some movement, significant challenges persist. High prices continue to pose barriers to affordability, particularly in areas that saw major increases during the pandemic, and the broader expectation is that the housing market will continue to experience growth in most metropolitan areas.
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Written by the digital marketing team at Creative Programs & Systems: www.cpsmi.com