Mid-Year Market

It is hard to believe that we are nearly halfway through 2024! What can we expect moving forward for the second half of the year in terms of the real estate market? Let’s examine some of the trends.

As the housing value appreciation returns to more normalized, pre-pandemic levels in 2023 and the beginning of 2024 following record-setting paces in 2021 and 2022, buyers and sellers are learning to adjust their expectations to the current market norms.

CoreLogic is a highly rated financial technology company that provides information and analytics to business and government. According to CoreLogic’s Home Price Index, U.S. single-family home prices rose 0.7% monthly and 5.5% annually in February 2024, and the company expects a slow, gradual increase in home prices over the rest of the year. Chief economist at CoreLogic, Selma Hepp, states: “Spring home price gains are already off to a strong start despite continued mortgage rate volatility. That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check.”

Chief economist at realtor.com, Danielle Hale, states: “Sellers are starting to warm up to the current environment, wading into the market in increasing numbers despite market mortgage rates that are likely above their existing rate, if they have a mortgage. As a result, data shows surprisingly competitive pricing trends among sellers.”

On May 1, 2024, The Federal Reserve left interest rates unchanged for the fifth straight meeting and signaled that they still plan to cut interest rates three times in 2024, even as recent data suggests that inflation has been more stubborn than expected. With expectations of the Federal Reserve rate cuts diminishing, potential homebuyers will not gain any cost advantage by staying on the sidelines in 2024. But the Federal Reserve only indirectly influences mortgage rates, as the ultimate determinant of what happens with the key home-financing rate is inflation. 

Greg McBride, chief financial analyst at Bankrate, a personal finance website, predicts that the 30-year fixed-rate mortgage will fall to 5.75% by the end of the year. Lower mortgage rates could translate into more supply, especially if it entices homeowners to give up their current mortgage rate and decide to list sell their homes. 

Regardless of current Federal Reserve policy, the best bet for obtaining the lowest possible mortgage rate in today’s market is to work on improving your credit score, paying down any debts, saving for a down payment, and shopping around for loans. 

Whether you are considering buying or selling a home, consult with your trusted real estate agent early on in the process to help guide you and assist in creating a plan specific to your needs and goals.

 

Debbie Austin is a realtor associate with Keller Williams, Roseville and has been helping clients buy and sell property in the area for 20 years. If you have a specific real estate question you wish to see addressed, contact Debbie at (916) 223-8144 or visit debbieaustinrealty.com.