November 1, 2024
- The Realtor.com® economics team video update gives you the relevant economic and real estate information you need to know each week every Friday to navigate the housing market as a homebuyer, home seller, or industry professional.
- For the week ending Friday, November 1, Realtor.com® Chief Economist Danielle Hale recaps the latest economic data focused on the labor market, which is slowing in a sign that workers are less confident about changing jobs.
- With Election Day right around the corner, job openings dropped to the lowest rate since December 2020, and while only 12,000 jobs were added to payrolls, the unemployment rate held steady at 4.1%.
- This contrasts with Consumer Confidence data which showed broad improvement in October. A month earlier, the Fed’s preferred inflation measure slowed to 2.1%, coming in just above the Fed’s 2% target—its lowest reading since February 2021.
- Hitting the inflation target is likely to help pave the way for another rate cut next week—the day after the Presidential election. I’m expecting a more typical 25 basis point drop versus the 50 basis points cut in September.
- But for housing, it’s important to remember that it’s the mortgage rate that matters and it does not move in lock-step with the Fed’s short-term rate cut.
- In fact, this week mortgage rates ticked up again by 18 basis points to 6.72%—the highest since August. While lower inflation should reduce upward pressure on mortgage rates, a stronger economic outlook tends to raise the real cost of borrowing, pushing rates higher, and so far, this trend has prevailed.
- Despite higher rates, mortgage applications trended above a year-ago pace for the sixth straight week, a promising sign for housing activity. Pending home sales also ticked up sharply in September.
- This is consistent with the Realtor.com October Housing Trends report which found that a growing number of sellers is helping to usher in even more pending activity.
- Home prices held steady, and time on market grew nationwide, but in markets like Boston, San Diego, and Seattle, the uptick in newly listed homes in September was followed by an increase in pending sales in October. This suggests that sellers who price a home well are likely to see an acceptable bid from buyers even if it takes a little longer for offers to come in than at this time last year.
- But weekly data from Realtor.com suggests that seller interest has waned as mortgage rates have surged putting a question mark on future sales momentum. In today’s market, mortgage rates are an important determinant of both buyer and seller activity.
- Finally, the seasonal best time to buy has passed nationwide, but conditions are still relatively favorable for buyers. In some swing-state markets like Phoenix, Detroit, and Charlotte buyers will see peak conditions next week, while the week following the election is best for buyers in Buffalo, NY.
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com®. And here’s what you need to know about the economy and housing market this week!
- As we near Election Day, the latest economic data was focused on the labor market.
- The majority of indicators point to continued slowing. Job openings dropped to the lowest rate since December 2020, and job quits also fell, a sign that workers are less confident changing jobs. Meanwhile, only a net 12 thousand jobs were added to payrolls, but unemployment held at 4.1% in October. This contrasts somewhat with Consumer Confidence data that showed broad improvement in current conditions and expectations.
- In September, the Fed’s preferred inflation measure slowed to 2.1% coming in just above the Fed’s 2% target, its lowest reading since February 2021. Like previously released CPI data, the overall gauge slowed while core inflation picked up which means the Fed will need to continue to be vigilant. But hitting the inflation target is likely to help pave the way for another rate cut next week. I’m expecting a more typical 25 basis point drop versus 50 basis points in September.
- It’s important to remember that for housing, the mortgage rate is the figure that matters, and it does not move in lock-step with the Fed’s short term rate. In fact, mortgage rates underscored that point this week, with the 30-year fixed rate climbing 18 basis points to 6.72%, its highest since August. While lower inflation should reduce upward pressure on mortgage rates, a stronger economic outlook tends to raise the real cost of borrowing, pushing rates higher, and so far, this trend has prevailed.
- Despite higher rates, mortgage applications for home purchases trended above year-ago pace for a 6th straight week, a promising sign for housing activity. Indeed, pending home sales ticked up sharply in September.
- Consistent with this, the Realtor.com October Housing Trends report found that a growing number of sellers is helping to usher in even more pending activity. Home prices held steady, and time on market grew nationwide, but the uptick in newly listed homes in September was followed by an increase in pending sales in October, especially in markets like Boston, San Diego, and Seattle. This suggests that sellers who price a home well are likely to see an acceptable bid from buyers even if it takes a little longer for offers to come in than at this time last year.
- But weekly data from Realtor.com suggests that seller interest has waned as mortgage rates have surged, putting a question mark on the longevity of this improvement. In today’s market, mortgage rates are an important determinant of both buyer and seller activity.
- Finally, we’re nearing the end of the seasonal best time to buy across the country, but the best weeks are still ahead in a smattering of areas. Election week offers home shoppers in swing-state markets like Phoenix, Detroit, and Charlotte peak conditions, while buyers in Buffalo will see the best time in the second week of November.
- 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. And instagram for graphics.
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