PARTNERS VOICE | MARKET FORECAST
August 2024

Summertime and the livin' is easy….yet we're all so BUSY! From our daily jobs to weekend projects, shuttling the kids to summer camp, going to barbecues and taking vacations, these summer months typically fly by. With so many competing activities, summer brings a softer, slower market than the more active spring, with successful buyers aiming to close and move into their new homes before the new school year begins. However, this summer is shaping up a little bit differently.

Rising Inventory & Demand

Mid-way through 2024, new listings are actually increasing at a faster pace compared to the same time last year. Inventory is slowly being added across the nation, with some outlying hotspots like San Jose, CA, where listings are up 49% and home sales are up 18% over 2023. More inventory on the market puts downward pressure on home prices, meaning more affordable options for potential buyers. We're seeing a higher number of sales closing this year, as hesitant sellers are beginning to take the leap and put their homes on the market.

Demand peaked at the beginning of May and has gone down around 6%, yet in that same time period inventory has grown 14%. Inventory typically peaks between mid-July and the end of August, and with mortgage rates finally (slightly) below 7%, demand will begin to increase and heat up the market. This slight drop in mortgage rates is a big step in the right direction for both potential buyers patiently waiting for more affordable options and for homeowners who have been on the sidelines watching the action.


Mortgage Rates: Positive Projections

The Fed relies on key indicators to consider rate cuts, and July's data met many of those conditions. Job market numbers came in at expected levels and inflation is slowly but steadily abating. Personal Consumption Expenditure (PCE), the Fed's preferred inflation gauge, is trending down, and the Consumer Price Index (CPI) is dropping closer to its 2% target. The one outlier was unemployment, coming in at 4.1%. With the aim of keeping that number from climbing, and with all the other data headed in the right direction, things are looking good for a potential quarter point rate cut in September.

Per Jiayi Xu at realtor.com, "Mortgage rates currently hover just below 7% and have stayed within a narrow range of 6.9% to 7.1% since mid-May. However, if the economy continues to improve…the Fed’s decision to begin normalizing policy will be on the horizon. This means buyers might see lower mortgage rates in the second half of 2024 and are more likely to jump back into the market." We'll be keeping an eye on it all for you, and if you have any specific questions, as always, feel free to reach out to us directly!

 

From all of us at Craft & Bauer, we wish you and yours a wonderful summer!

 

 

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