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Signs of Change on the Horizon – Is the 2024 Housing Market Signaling a New Chapter?
The housing market has been facing challenges recently, but there are indications that things might be turning around. Let’s dive into some key metrics and what they mean for buyers, sellers, and the industry as a whole.
Market Indicators: A Mixed Bag
The home purchase market weekly index since 2021 and existing home sales (seasonally adjusted annual rate) have both been underwhelming. These numbers paint a picture of a sluggish market, but there’s more to the story.
Mortgage Rates: A Silver Lining
One of the main factors contributing to the market slowdown has been high mortgage rates. However, there’s good news on this front. Mortgage rates have been steadily declining, recently hitting a 17-month low. In the week ending August 23, the average 30-year fixed-rate mortgage with conforming loan balances dropped to 6.44%, the lowest since April 2023. This marks the fourth consecutive week of rate declines.
Inventory: A Positive Sign
The months’ supply of existing homes is also showing promise. As inventory climbs and rates drop, we might be on the cusp of a market turnaround. It’s reminiscent of a pivotal moment in a football game – you can feel the momentum shifting.
A Word to Potential Buyers and Sellers
If you’re in the market, whether buying or selling, it’s crucial to understand that you’re still very much in the game. The current conditions, while challenging, present opportunities for those who are prepared.
The Commission Conundrum
An interesting trend has emerged with some sellers choosing not to offer commissions to buyers’ agents. This strategy could have significant implications:
- Limited representation for buyers
- Reduced pool of potential buyers
- Possible negative impact on home values
It’s worth noting that as of August 2024, the average American renter had $16,930 in savings. However, the median renter household has significantly less, with only about $630 in cash savings. This disparity highlights the importance of seller-paid commissions in ensuring fair representation and access to home-ownership, especially for low-income, under-served, and minority communities.
The Bigger Picture
It’s important to remember that in real estate, many buyers are also sellers and vice versa. When looking at seller-paid commissions from this perspective, the numbers tend to balance out in the long run.
Looking Ahead
While the current market presents challenges, there are signs of positive change. The declining mortgage rates and increasing inventory suggest that we might be on the brink of a more dynamic and exciting phase in the housing market. For those involved in real estate – whether as buyers, sellers, or professionals – staying informed and adaptable will be key to navigating the evolving landscape.
