Gta Real Estate News
Mireille Duhon
Nonetheless, experts say the housing market will only see renewed momentum once mortgage rates drop enough to ease buyer affordability obstacles and incentivize homeowners locked in at low rates to move.
Unfortunately, hopeful buyers continue to see a delay in this yearned-for transformation, thanks to several ongoing headwinds. One is inflation taking its sweet time cooling off, further delaying the Federal Reserve from cutting the federal funds rate.
Of course, mortgage rates would need to cool off, which seems promising given the recent declines. The average 30-year fixed mortgage rate remained consistent in July, coming in at 6.78% for the week ending July 25, a minor increase from 6.77% the previous week.
Following years of litigation, the NAR has agreed to pay $418 million to settle a series of high-profile antitrust lawsuits filed in 2019 on behalf of home sellers. The settlement received preliminary court approval in April. A judge is expected to grant final approval in November. Meanwhile, NAR announced that the new required practices will go into effect on August 17.
The required new rules prohibit broker compensation offers on multiple listing services (MLS), the private databases that allow local real estate brokers to publish and share information about residential property listings.
High mortgage rates and sticky inflation are largely to blame for the dampened outlook for new construction, with builder confidence sliding from 45 to 43 in May, according to the most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the second consecutive month of downward movement and negative sentiment.
Permits for new single-family homes fell to their lowest seasonally adjusted annual rate since June 2023 amid builder blahs, dipping 2.9% month-over-month in May, according to the latest data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD). Housing starts were down 5.2%, and completions slid 8.5% from April.
Existing-home sales dipped 0.7% in May, according to the latest report from NAR, marking the third straight month of declines as ascending mortgage rates and home prices deterred potential buyers. In May 2023, home buyers could get a mortgage rate well over half a percent lower at a time when homes were also more affordable.
One upside to fewer sales is that resale inventory has been loosening since December. The latest NAR data shows inventory growing 6.7% month-over-month, logging 1.28 million unsold homes at the end of March. Still, only 3.7 months of inventory remain at the current monthly sales pace. Most experts consider a balanced market between four and six months.
Amid mortgage rates hovering close to or above 7%, May sales of newly constructed single-family houses plunged 11.7% 4.7% compared to April and 16.5% from a year ago, according to the latest U.S. Census Bureau and HUD data.
A pending home sale marks the point in the purchase transaction when the buyer and seller agree on price and terms and is considered a leading indicator of a closed existing-home sale within the next one to two months.
Even so, with fewer homes selling, Dan Hnatkovskyy, co-founder and CEO of NewHomesMate, a marketplace for new construction homes, sees a price collapse within the realm of possibility, especially in markets where real estate investors scooped up numerous properties.
Most experts do not expect a housing market crash in 2024 since many homeowners have built up significant home equity. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time homebuyers.
With over three years of experience writing in the housing market space, Robin Rothstein demystifies mortgage and loan concepts, helping first-time homebuyers and homeowners make informed decisions as they navigate the home loan marketplace. Her work has been published or syndicated on Forbes Advisor, SoFi, MSN and Nasdaq, among other media outlets.
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Taking all this into account, housing economists and analysts agree that any market correction is likely to be modest. No one expects price drops on the scale of the declines experienced during the Great Recession.
Economists have long predicted that the housing market would eventually cool as home values become a victim of their own success. After posting a year-over-year decrease in February 2023 for the first time in more than a decade, the median sale price of a single-family home has been on the rise again, reaching the highest price NAR has ever recorded in May 2024.
Overall, home prices have risen far more quickly than incomes. That affordability squeeze is exacerbated by the fact that mortgage rates have more than doubled since August 2021.
Industrial fundamentals have slowed following several years of record-shattering demand and rent growth. Supply is now exceeding demand in most markets while rents have plateaued. Tune in to learn more.
Commercial real estate investors are hoping for normalization in 2024 as property values should stabilize, transaction activity rebound from a shallow 2023 and fundamentals hold their own. But this situation is unlikely to play out evenly across all property types. Tune in to hear our views.
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