Realtor.com shares, "mortgage rates climbed from 6.44% last week to 6.54% for a 30-year fixed home loan for the week ending Oct. 24, according to Freddie Mac.
“The continued strength in the economy drove mortgage rates higher once again this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy.”
Unfortunately for would-be homebuyers—and sellers—this uptick marks the fourth week in a row that mortgage rates have risen.
“This rapid run-up in mortgage rates has sapped some of the burgeoning enthusiasm in the market, which was spurred by near 6% rates in September,” explains Realtor.com® senior economic research analyst Hannah Jones.
Will the fluctuations in mortgage rates persist or find a balance as the holiday season kicks into gear? As we enter the last full week of October, 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 landscape
Next week could potentially have a big impact on mortgage rates, one way or another.
On Thursday, the Federal Reserve will release its preferred inflation gauge, the Personal Consumption Expenditures Price Index. This index measures the average change in prices paid by consumers for goods and services and is used to gauge inflation and guide U.S. monetary policy.
Then, on Friday, the October jobs report—another indicator the Fed uses to track the economy’s health—comes out. In other words, a lot of economic information will hit the Fed, and depending on the data, it could sway where borrowing rates land next.
“If the data comes out hotter than anticipated, we might see mortgage rates increase during election week,” says Realtor.com economist Jiayi Xu in a recent report.
However, that doesn’t mean rates will remain high for the rest of the year.
“Rates are expected to generally move lower in the coming months,” adds Xu.
Listing prices remain stagnant
Despite the ongoing seesaw of mortgage rates, home prices remain stable.
The median list price was flat for the week ending Oct. 19 compared with the same time last year, holding steady at 0.0%.
This marks 21 consecutive weeks that the median list price was less than or equal to what it was during the same week in 2023. (The median-priced home was $425,000 during September.)
While listing prices haven’t fallen significantly, buyers can still save money. The share of listings with price reductions grew to 18.6% in September, which is 0.9% more than the previous year.
“Sellers continue to adjust prices to encourage home shopper attention,” says Xu.
The number of homes for sale spikes
Buyers have more listings to choose from as fall settles in.
Housing stock was 28.7% higher for the week ending Oct. 19 than the prior year, marking the 50th week in which the number of listings has grown year over year.
Yet, it was also the fifth week of slowing growth and the lowest annual change since April.
“Much of the inventory buildup is due to more seller activity than buyer activity, but the number of active listings has stabilized over the last few weeks, suggesting buyer activity could be starting to keep up,” says Xu.
Fresh listings also jumped for the week ending Oct. 19, with 4.7% more new listings hitting the market than a year ago.
However, recent fluctuations in mortgage rates “may discourage more sellers from listing their homes until rates decrease further,” says Xu.
The pace of home sales slows
Home shoppers didn’t exactly snap up homes for the week ending Oct. 19, with houses spending eight days more on the market compared with the same week in 2023. (The typical home spent 55 days on the market last month.)
“Generally, buyers have been holding off, waiting for more affordable housing conditions,” says Xu. “However, with more options available, still-keen buyers may be feeling ready to act before winter.”
To make things easier, the Realtor.com mortgage affordability calculator helps buyers evaluate how rate changes might affect their monthly payments, allowing them to adjust their expectations and plans accordingly.
“For those looking to purchase a home before the year ends, taking advantage of a slower market, increased inventory, and stable prices could also be a smart strategy,” says Xu."
Source: Realtor.com
Written by: Julie Taylor
Published: October 24, 2024
Posted by Grossman & Jones Group on
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