March 2024
- The Realtor.com® economics team video update gives you the relevant economic and real estate information you need to know to navigate the housing market as a homebuyer, home seller, or industry professional.
- In March, Chief Economist Danielle Hale highlights still-strong economic readings including the latest labor market and inflation data. She hones in on key inflation metrics and how shelter costs are contributing. She notes that shelter costs have decelerated, and rents are falling annually, which should eventually be reflected in the inflation data.
- Danielle also reviews the thinking from the March Fed meeting and how the committee’s economic projections signaled that interest rates may remain ‘higher for longer’, dependent on incoming data. She notes that mortgage rates could ease, mirroring the decline in 10-year treasury yields.
- Danielle offers a potential hack for securing a lower-rate mortgage via an assumable loan. She notes that these loan types are not widespread, but are more popular in some markets.
- Turning to the latest Realtor.com housing data, Danielle notes reasons for optimism. February Housing Trends Report report, authored by Economic Data Manager Sabrina Speianu, showed that listing trends registered growth for a 4th straight month.
- Existing home sales surged to their highest pace in a year in February, and sales prices moved higher as buyers took advantage of fresh inventory and lower mortgage rates early in the year.
- Danielle notes February’s strong new construction data, highlighting the highest level of single-family home starts since April 2022.
- With the spring approaching, Danielle highlights the upcoming Best Time to Sell, the week of April 14-20, during which sellers will see the best mix of conditions to sell a home, relative to the rest of the year.
- Finally, Danielle notes new climate risk data available on Realtor.com, and the accompanying research by Economist Jiayi Xu. She reflects on a panel discussion at South by Southwest in Austin, where she was joined by a U.T. Professor & climate researcher and the Founder and CEO of First Street, a leading climate risk data provider, and a Tampa-based real estate leader to discuss how climate change impacts housing.
- Find details and Realtor.com® housing data for download at realtor.com/research. And follow us on X (formerly twitter): @rdc_economics, for real time updates.
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com® . As we move toward spring and the most active season of the housing calendar, here’s what you need to know!
- Economic growth is still strong and that’s reflected in still robust labor market readings. Although January’s blockbuster job growth was revised lower, payrolls still grew and the U.S. added another 275,000 jobs in February.
- Unemployment ticked higher, but wages continued to grow faster than inflation. All in the labor market looks to be on solid footing.
- Annual inflation continues to surpass the Fed’s 2% target with both energy prices and shelter costs contributing to the gain. Shelter inflation decelerated somewhat, but is still too high. Rents are an important contributor to measured shelter inflation, and Realtor.com data, which show that rents are easing, suggest that we’ll eventually see this reflected in inflation metrics.
- Against this macro backdrop, the Fed held rates steady following its March meeting. Its updated economic outlook still anticipates policy rate easing before the end of 2024, but implied that the policy rate might decline more slowly in 2025 and 2026 if economic growth remains higher and inflation declines more slowly as currently expected.
- Mortgage rates which had eased in early March ticked up mid-month to 6.87%. However, the post-Fed meeting decline in 10-year yields suggests another pivot could be in store. Taking a big step back, mortgage rates have hovered in a 6.6% to 7% range since late December and are likely to continue in this range until economic data more clearly delineate whether a hard or soft landing is ahead.
- Research from Hannah Jones suggests a potential hack for those looking for a below-market mortgage rate. Assumable loans–mortgages that allow a buyer to take over a home seller’s existing mortgage, including its current rate–are the default for certain mortgage types including FHA, VA, and USDA loans. They aren’t for everyone because of the additional paperwork and advocacy required from the buyer, but as many as 1 to 3% of sellers in some markets are advertising this feature in their listing description.
- Turning to housing data, there are promising signs. The Realtor.com February Housing Trends Report, compiled by Sabrina Speianu, showed that not only are active and new listings again on the rise, we saw an even bigger uptick in the number of homes priced in the $200,000 to $350,000 range–below the current median list price. Home prices continued to advance, and time on market remains low.
- Both buyers and sellers took advantage of increased inventory and existing home sales surged to their highest pace in a year. Sales prices also moved higher. These February closings reflect home shoppers who likely locked in some of the lowest mortgage rates in the last 6 months.
- The pickup in sales has propelled builder optimism and an uptick in construction activity in February that brought single-family starts to their highest level since April 2022.
- While the housing market balance continues to favor sellers in just about any week of the year, sellers can leverage predictable seasonal trends to plan to maximize their odds of success. The Realtor.com Best Time to Sell report identifies the best week to list your home for sale in the U.S. as well as many major markets.
- Finally, the recent addition of Heat, Wind, and Air Quality data to the environmental risk experience on Realtor.com gave us the opportunity to dig into what this means for housing. Jiayi Xu led the Realtor.com Housing and Climate Risk Report and I had the opportunity to share our findings at South by Southwest in Austin on a panel about how climate change is shaping the ways that people find a home. I was joined by a U.T. Professor & climate researcher and the Founder and CEO of First Street, a leading climate risk data provider, and a Tampa-based real estate leader.
- You’ll find all the details including full reports and our housing data for download at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates.
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