We’re living a housing Groundhog Day
Hello Everyone—this is Justin O’Neill with Flyhomes. Each week, the team and I put together a very digestible, easy-to-understand update on what’s happening in residential real estate.
We cover four categories each week: 1. MORTGAGE RATES, 2. INVENTORY, 3. DEMAND, and 4. PRICING. With that, here are the numbers for the week of October 14th, 2024.
The theme for this week is ‘been here before.’ We’re living in the housing industry’s version of Groundhog Day—the classic 1993 rom-com starring Bill Murray and Andie MacDowell. As we’ve seen time and again, rates got very close to dropping below 6%—as close as 6.08% at the end of September—only to climb back into the mid-6% range, where we sit today at 6.50% on the nose. This reinforces what we’ve been saying throughout this rate cycle: consumers are more sensitive to trends than to the actual numbers, and right now, the trend is moving in the wrong direction, as evidenced by the 17% decrease in weekly mortgage applications.
Mortgage Rates
As mentioned, MORTGAGE RATES are back in the mid-6% range. Don’t expect much movement in the short term because we won’t get another jobs report from the Bureau of Labor Statistics until Friday, November 1st, which will provide insight into how things looked in October.
Inventory
Shifting to INVENTORY, which fell week-over-week to 730,000 single-family homes unsold on the market. This decrease is a result of the recent spike in demand we saw when mortgage rates nearly dropped below 6% a few weeks back. Overall, inventory is in a much better place year-over-year, with 34% more homes on the market than a year ago.
Demand
This brings us to DEMAND, which, as I hinted earlier, followed the rate changes. When rates were declining, demand picked up; when rates climbed, demand waned. We need stability—ideally, a drop in rates followed by stability—but either way, we need to stick around a certain number. Consumers are proving to be very sensitive to trends in rates, and no one wants to feel like they are “locking in a rate” that’s on the rise.
Pricing
Finally, let’s talk PRICING, which is down ever so slightly this week. Overall, we’re basically in the same place as we were three weeks ago, and the 1.5% week-over-week decline is a product of the spike in demand over the past few weeks, which in turn created an unexpected jump in prices. It’s almost as if the last three weeks never happened—good or bad—Groundhog Day.
Wrap Up
Please reach out to me directly with any questions about this report at joneill@flyhomes.com. To learn more about Flyhomes’ industry leading buying and selling solutions check out our Buy Before You Sell and Cash Offer product pages.
Sources:
- Altos Research
- HousingWire
- St. Louis Federal Reserve
