Welcome back to the Flyhomes Lounge. This is the first of our weekly series called Flight School : Aerial View, dedicated to giving you the latest updates on the real estate market in less than five minutes.
Each week, we gather and summarize data from the leading analysts and economists in the real estate industry to provide you with a snapshot of what’s happening with mortgage rates, inventory, demand and pricing. Below are some key insights for the week of October 16, 2023.
Starting with mortgage rates: Numbers for a 30-year fixed-rate mortgage eclipsed 8% for another week as the Treasury yield surpassed 4.9% for the first time since 2007. Rates are in the 8% range, which continue to dampen both buyer demand and seller desire, reflected by mortgage application activity being at its lowest levels in 29 years.
As for inventory, there are currently 546,000 single family homes unsold on the market, that’s up 1.8% from last week, a big jump considering where we’re at in the year. Inventory is also showing no signs of slowing. Last year as the market slowed in the fourth quarter, inventory grew through the last week of October and it’s repeating again this year. Typically we see inventory fall in November as new listings decline due to the holidays, or being withdrawn from the market but the lack of demand is allowing for this rare late-year growth.
Which brings us to our third category, demand. Homes on the market are getting fewer offers, resulting in 38% taking price cuts from original list price. Typically this number is closer to 30% and this tells us there are downward pressures on sales prices over next few months. It’s notable though that at this time last year price reductions were over 42% and home prices dipped in Q4 before recovering in 2023.
Let’s shift to our fourth and final category, pricing. The median price of a single family home this week is $439,000 now, up from $430,000 this same time last year. It is now clear that we will finish the year up about 1-3%, something no one predicted heading into 2023. The leading indicators for future home sales prices right now are not as bearish as they were last year at this time and the expectation is that price appreciation will remain steady heading into 2024.
Be sure to check back weekly for another market snapshot! Reach out now to learn even more about how Flyhomes can help you on your home buying and selling journey.
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