Hello! Welcome back to Flight School – Aerial View, where we take a quick look at the latest market updates.
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 30, 2023.
Mortgage rates moved lower over the course of the week, with the 30-year fixed mortgage rate coming in around 7.5%, compared to almost 8% last week. The dip is welcome news for buyers who were hoping for some much needed relief. It is also worth calling out that the 10-year Treasury yield fell after a softer jobs report this week, which should help ease total affordability for prospective buyers. In terms of job reports, this is where housing and real estate are in a tough spot. Job strength equals rates staying high, job weakness equals rates coming down. While a decrease in interest rates is positive for real estate, it means challenges beyond our industry.
Let’s talk inventory – the number of available unsold single family homes rose 1.5% again this week to 562,000. Last year at the end of October inventory finally peaked and that corresponded with mortgage rates peaking. Inventory has been climbing more quickly this year as well, but we should see the numbers start to decline in November as homes that have not received offers will begin to be pulled from the market. Because we have so few sellers, inventory remains 40% below 2019, and less than half of where it’s been on average for the last decade.
For our third topic, demand, we can glean insights from the inventory numbers. More specifically, the fact that inventory is not rising because of a flood of sellers, it’s rising from fewer buyers. The supply demand equation is balanced right now with both low supply and low demand, and thus prices remain high.
As for pricing, 38.9% of homes on market price have now had a price cut. Typically price cuts peak in October. Last October, 43% of homes had price cuts due to the downward pressures on pricing. Less so this year. A big reason for less price cuts this year is that sellers are much more prepared for the market. Last year many sellers were unprepared and surprised by the overall lack of demand. We see this reflected in the fact that home prices for this week are up 2% over this same time last year to $435,000 – something that surprises many casual market observers.
WRAP UP
That’s it for this week. We’ll be back next week with another market snapshot. If these quick info drops aren’t enough (believe us, we know these topics can be A LOT), we encourage you to reach out to your local Flyhomes Agent for a free, no obligation Home Buying Consultation. We’ll be here to help you take the first step on your home buying and selling journey.
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