This Week’s Highlights:
- Mortgage Rates
- Inventory Trends
- Market Demand
- Pricing Insights
Summary: Mortgage rates remain steady in the high 6’s, with the market already adjusting for an anticipated Fed rate cut. Inventory continues to grow, demand is surprisingly strong, and prices are up 5% year-over-year, signaling ongoing market resilience despite affordability challenges.
1. Mortgage Rates
As of December 11th, the average 30-year fixed mortgage rate stands at 6.85%, maintaining its position in the high 6% range. All eyes are on next week’s Federal Reserve meeting, where a 0.25% basis point rate cut is widely anticipated.
Today’s Consumer Price Index (CPI) data revealed a slight uptick in inflation, but it’s unlikely to shift the Fed’s plans. Mortgage rates have already dipped slightly from the 7% mark in anticipation of this announcement. This is a classic case of the market pricing in changes before they’re officially implemented, so don’t expect a further immediate drop following the Fed’s decision on December 18th.
2. Inventory Trends
Inventory levels continue to rise steadily. This week, 690,000 single-family homes are available nationwide—a 26% increase compared to the same week last year and just 17% below 2019’s pre-pandemic numbers.
Interestingly, I came across a theory for the lack of inventory that gets far less credit than it should– “home hoarding.” With many homeowners benefiting from historically low mortgage rates, some buyers are opting to hold onto their previous homes as rental properties rather than selling. This dynamic is contributing to a unique inventory landscape as we try and work our way back to a healthy housing market.
Last week saw 31,000 new listings, even with the Thanksgiving holiday factored in. This reflects an 8% increase in sellers entering the market compared to the same period last year.
3. Demand
Demand remains higher than expected. Mortgage applications are strong given the season and the current rate environment. This week, home sales are running 10% above the levels seen at this time last year. While the Thanksgiving holiday temporarily slowed the pace, December 2024 is shaping up to outperform December 2023.
4. Pricing Insights
The median sale price of single-family homes this week is $384,900, reflecting the prices buyers are paying—not the listed prices. This represents a 5% year-over-year increase.
Looking ahead, most economists and financial institutions are projecting 3% price appreciation in 2025. Despite challenges around affordability, inventory, and pricing, home values continue to rise. The resilience of the market underscores the enduring strength of housing as an asset class.
That’s it for this week’s housing market update! Have questions or want to dive deeper into these trends? I’d love to hear from you.
Contact Me: joneill@flyhomes.com
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