Category: Market Reports

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June 2024 Real Estate and Mortgage Report

The overwhelming majority of prospective homebuyers believe that buying a home, now or in the future, is the best decision for them in the long run. While it’s easy to get pre-occupied with interest rates, they shouldn’t be the only part of your home buying decision-making process. Insights “Astonishingly, greater than 90 percent of the country’s metro areas experience home price growth despite facing the highest mortgage rates in two decades . . . In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand. Lawrence Yun, Chief Economist, NAR “Buy now, or wait? That’s the question prospective homeowners have been struggling to answer in today’s housing market. Home prices have been skyrocketing recently, and the Federal Reserve’s work to tame inflation sent mortgage rates soaring, too. The combination has led many would-be buyers to pick the “wait” side of the equation. Bankrate     Forecasts Zillow’s forecasts of home values and existing home sales were both revised downward this month. Zillow’s home value forecast now anticipates 0.6% growth over 2024, down from last month’s projection for 1.9% growth over 2024 and much slower than the pre-pandemic average annual appreciation rate of

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May 2024 Real Estate and Mortgage Report

While home prices are growing, home sizes are decreasing. More than a third of builders say they built smaller homes in 2023, and more than a quarter plan to construct even smaller this year, shares the NAHB. Home size is trending lower and will likely continue to do so as housing affordability remains constrained. Insights “The path to Gen Z homeownership may have its own share of challenges, but that’s not stopping Gen Z, nicknamed “Zoomers,” from buying homes. In fact, some Gen Z real estate trends are pointing in an optimistic direction. According to a recent study from a major real estate brokerage about 30% of 25-year-olds owned their own homes in 2022, 2-3% ahead of both millennials and Gen X at the same age. Chase “My personal forecast is that we will begin to see further progress on inflation this year. I don’t know that it will be sufficient; I don’t know that it won’t. I think we’re going to have to let the data lead us on that. Jerome Powell, Chairman, Federal Reserve   Rates After benefitting from stable mortgage rates in the first couple of months of the year, the housing market witnessed a slowdown in

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April 2024 Real Estate and Mortgage Report

The inventory of homes actively for sale increased in 45 out of 50 of the largest metros compared with last year, and in four large metros, inventory was above pre-pandemic levels. With the anticipation of lower mortgage rates by the end of the year, home buyers could have more options and a bit more affordability.   Insights “Current expectations are that the Fed will start to cut rates at some point between June and September. The exact timing depends on how incoming economic data looks. The Fed’s March meeting did not set up the prospect of a near-term interest rate cut, but a summer cut appears likely. Forbes “Consumer attitudes toward home-selling conditions increased markedly in February, with current homeowners, in particular, expressing greater optimism that it’s a ‘good time to sell,’ a development that may foreshadow an upcoming increase in existing home listings. Doug Duncan, Senior VP and Chief Economist, Fannie Mae   Forecasts Housing prices in the US were surprisingly resilient last year in the face of a jump in mortgage rates. Now, with the prospect of interest rate cuts on the horizon, home prices are expected to climb more than previously anticipated, according to Goldman Sachs Research.

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March 2024 Real Estate and Mortgage Report

The real estate market continues to exceed expectations. There are more than 1M fewer foreclosures in the last five years, home prices rose in 96 of the top 100 largest metropolitan areas over the last four quarters, and Americans are sitting on tremendous equity. Insights “Policymakers now risk committing another policy error, this time by waiting too long to begin cutting interest rates. It is unclear why Fed officials feel it necessary to take this risk. After all, they’ve all but achieved their dual mandates of a full-employment economy and low and stable inflation. Mark Zandi, Chief Economist, Moody’s Analytics “Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years . . . While we are not experiencing the double-digit gains seen in the previous two years, above trend growth should be well received considering the rising costs of financing home mortgages. Brian D. Luke, Head of Commodities, S&P Dow Jones Indices   Forecasts Goldman Sachs, Mortgage Bankers Association, Zillow, Fannie Mae, Freddie Mac and NAR all agree that home prices will increase in 2024. Looking back at the forecasts made in November 2023, we can see that the major

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February 2024 Real Estate and Mortgage Report

There is a narrative we must combat in the real estate market. The latest Fannie Mae report showed 24% of consumers believe their prices are going to depreciate over the last 12 months. We actually had a very strong 2023 and we’re going to finish this year between five and six percent appreciation.   Insights We anticipate that after the past several years of extreme volatility in interest rates, the 30-year fixed rate mortgage rate will continue to moderate over the course of 2024, moving toward a rate below 6 percent by year end. Doug Duncan, Senior VP and Chief Economist, Fannie Mae Geographic patterns in price gains continued to favor housing markets in the Northeast and the South, especially those that remain more affordable and have lagged in home price increases over the past couple of years. Dr. Selma Hepp, Chief Economist for CoreLogic   Forecasts What’s taking place with future home appreciation? The latest reporting of the major forecasters, shows that on average, when we average all eight together, the expectation is a 2.7% home price appreciation. Since November, many of the forecasts appear more optimistic and have increased their projection by upwards of 3%.     Rates

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January 2024 Real Estate and Mortgage Report

The real estate market remains strong, bolstered by the recent drop of mortgage rates. Home prices are expected to continue their upward trajectory in 2024, with most markets reaching new price highs. Insights It appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards. Dean Baker, Senior Economist, Center for Economic Research We now forecast three consecutive 25bp cuts in March, May, and June to reset the policy rate from a level that Powell has recently taken to describing as “well into restrictive territory” rather than just “restrictive”. Goldman Sachs, December FOMC Recap Forecasts The real estate market is projected to experience strong demand in early 2024, driven by dropping mortgage rates. This trend is expected to put pressure on home prices, with most markets reaching new price highs throughout the year. Forecasts from various sources, including CoreLogic, Case-Shiller Index, and Realtor.com, indicate an increase in home prices and a recovery of losses recorded in the previous year.     Rates With rates dropping, the demand for homes is expected to be strong in 2024. The

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