Realtor.com shares, "Mortgage rates rose from 6.32% last week to 6.44% for a 30-year fixed home loan for the week ending Oct. 17, according to Freddie Mac.
“The 30-year fixed-rate mortgage increased for the third consecutive week, moving closer to 6.5%,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “In general, higher rates reflect the strength in the economy that is supportive of the housing market. But notably, as compared to a year ago, rates are more than one percentage point lower and potential homebuyers can stand to benefit, especially by shopping around for the best quote as rates can vary widely between mortgage lenders.”
This wasn’t exactly the news homebuyers were hoping for.
“While we expect the long-run trend in mortgage rates to be downward, recent weeks have brought volatility,” explains Realtor.com® senior economist Ralph McLaughlin. This repetitive seesaw pattern could last until the last week of the month.
Even so, October remains the best time to buy in many markets.
“Homebuyers should make buying decisions on finding the home that best meets their current and future needs, not on the short-term volatility in mortgage rates,” advises McLaughlin.
What else do these rate fluctuations mean for the fall and winter markets? Here’s a snapshot of the latest housing market data and what it means for homebuyers and sellers in the latest installment of our “Weekly Housing Market Update.”
The mortgage rate outlook
Many people expected mortgage rates to take a major nosedive after the Federal Reserve cut interest rates last month for the first time since 2020—but that drastic free fall hasn’t materialized.
“In general, the housing market has carried on without any major shifts in recent months, despite falling mortgage rates,” says Realtor.com senior economic data analyst Hannah Jones in a recent report.
Most outstanding mortgages have a 6% or lower rate, which creates a “lock-in effect” for many current owners who don’t want to swap a low rate for a higher one. This could limit homeowners’ willingness to sell, slowing or stalling the housing market.
The fast-approaching 2024 presidential election might also be giving buyers and sellers pause as they wait for the political dust to settle.
Listing prices stays flat
Mortgages may be on a constant roller coaster as of late, yet home prices remain stagnant.
The median list price didn’t rise or fall for the week ending Oct. 12 compared with the same time last year, remaining unchanged at 0.0%.
This was the 20th week in a row that the median list price was less than or equal to what it was at the same time last year. (The median-priced home cost $425,000 in September.)
Meanwhile, “sellers continue to adjust prices to encourage home shopper attention,” says Jones.
Indeed, the share of listings with price reductions increased to 18.6% in September—a 0.9 percentage point gain over the previous year.
More homes to choose from
Despite uncertainties in the market, many sellers are listing their homes.
Over the past few weeks, the number of active listings has stabilized, “suggesting buyer activity could be starting to keep up,” says Jones.
The total number of homes for sale during the week ending Oct. 12 was strong, up 29.7% higher than the previous year. This marks 49 weeks in a row that the number of listings exceeded the previous year’s levels.
However, fresh listings seem to have fallen annually last week after spiking 8% only a week before. The decrease was partly due to Hurricane Milton, which halted new listing activity in many areas, making exact data collection impossible.
Home sales slow down
More houses to choose from means buyers are taking their time making an offer. As a result, homes lingered on the market for eight days longer during the week ending Oct. 12 than they did at the same time last year. (The typical home spent 55 days on the market in September.)
“Generally, buyers have been holding off, waiting for more affordable housing conditions,” says Jones.
However, with more options available, Jones notes that “still-keen buyers may be feeling ready to act before winter.”
If homebuyers do choose to get off the sidelines, they’ll enjoy various benefits, including reduced competition.
“We encourage buyers to forget about mortgage rates and focus on taking advantage of a slower moving market, increasing price cuts, and inventory levels not seen in years,” says McLaughlin."
Source: Realtor.com
Written by: Julie Taylor
Published: October 17, 2024
Posted by Grossman & Jones Group on
Leave A Comment