Sales are up, rates are down, and total cost of ownership has falling 14% from the peak in May.
Hello, everyone—this is Justin O’Neill with Flyhomes. Each week, the team and I put together a very digestible, easy-to-understand summary of what’s happening in residential real estate on a national level
Each week, we cover four categories: 1. MORTGAGE RATES, 2. INVENTORY, 3. DEMAND, and 4. PRICING. With that, here are the numbers.
The theme for this week is a glimmer of hope—hope that housing has finally turned a corner. Sales numbers are up, rates are down, and the total cost of ownership has dropped 14% from the peak in May and 10% from the same week last year.
With that, let’s get into it.
Starting with MORTGAGE RATES, which are at 6.25% for a 30-year fixed as of Wednesday, October 2nd. Historically, activity in the housing market picks up when rates fall 2 percentage points from the cycle’s peak and remain down for some time. We’ve now seen that percentage drop; we just need rates to stay in the low 6% range, and all the data suggests they will.
Shifting to INVENTORY, which is still rising for the moment—typical for this time of year. In terms of new listings, 63,000 unsold homes entered the market this week. Anecdotally, we’re starting to see and hear about multiple-offer situations across the country. There’s not a flood of sellers, so prices aren’t falling. Instead, we’re seeing balance—the closest thing to healthy market growth in three years.
This brings us to DEMAND, where we are now unequivocally seeing consumers react to cheaper mortgage rates. 363,000 single-family homes went under contract this week, a 1% increase over last week and 6% higher than the same week last year. Another healthy sign for the market: throughout September, homes were receiving offers faster than they were closing, pushing up the count of pending homes.
Lastly, PRICES continue to be resilient, even showing slight gains. For those waiting for a price correction, the data simply doesn’t support that. Prices held firm through some of the weakest demand periods in housing history and now appear to be on the rebound. We’ve already hit the floor and bounced back. As mentioned earlier, prices are just one component, and the total cost of ownership is down 14% from the peak in May and 10% from this time last year. That’s the bit of optimism I’ll leave everyone with this week.
WRAP-UP
Please feel free to reach out to me directly with any questions about this report at joneill@flyhomes.com. If you’d like to learn more about Flyhomes, you can contact us at hello@flyhomes.com. Take care, and we’ll have more next week.
Sources:
Altos Research
HousingWire
Notorious R.O.B.
Real Estate Insiders Unfiltered
St. Louis Federal Reserve
