October 11, 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 October 11, Chief Economist Danielle Hale recaps a key update about how inflation continues to flash mixed messages. On the one hand, overall inflation improved. On the other hand, core inflation–which can be a signal of underlying price pressure–ticked up.
- After September’s larger Fed rate cut, investors and the Fed had different expectations about what was ahead, with the market far more confident in the likelihood of larger cuts than the Fed was. After the recent job and inflation readings however, the market has shifted closer to the Fed’s outlook, expecting just 50 basis points in cuts by year’s end.
- For mortgage rates, this means that declines have stalled and actually even reversed. After the largest one-week jump in 6 months, mortgage rates registered 6.32% roughly a quarter point higher than recent 2-year lows.
- The prior drop in mortgage rates had helped revive home purchase sentiment, with an uptick in those saying it’s a good time to buy. But we may not see an immediate flood of buyers back to the market as a new record-high—42% of respondents—said that they expected mortgage rates to decline in the next 12 months. Some shoppers may choose to wait for these lower mortgage rates–especially given this week’s higher trend. Even so, mortgage applications for home purchases have continued to trend higher than one-year ago for a 3rd straight week.
- In weekly data from Realtor.com, we see that today’s shoppers face conditions largely similar to recent weeks. In this typically buyer-friendly season, listing prices are steady, and new listings continue to grow, helping to push active inventory higher. Meanwhile, time on market gives shoppers more time to consider options as sellers practice patience.
- Nationwide we’re in the “almost” best time to buy where listings are usually somewhat scarcer than in the best week, but otherwise buyers are still in a good position. However, in San Francisco, Baltimore, and Kansas City, the best week for buyers is coming up next week! Oct 13-19.
- Finally, an analysis of homeowners and mortgages highlights variation that could drive the housing market’s reaction to lower rates. In younger cities where homeownership rates are lower, a greater share of homeowners have mortgage debt, while in markets where homeownership is more prevalent and homeowners are older, a greater share of homeowners own their home outright with no mortgage. As mortgage rates decline, these markets with more widespread mortgage debt could see a greater pickup in housing activity.
- 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 now instagram @realtordotcomecon for graphics.
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!
- The key data update was inflation, which continues to flash mixed messages. On the one hand, overall inflation improved. On the other hand, core inflation–which can be a signal of underlying price pressure–ticked up.
- After September’s larger Fed rate cut, investors and the Fed had different expectations about what was ahead, with the market far more confident in the likelihood of larger cuts than the Fed was. After the recent job and inflation readings however, the market has shifted closer to the Fed’s outlook, expecting just 50 basis points in cuts by year’s end.
- For mortgage rates, this means that declines have stalled and actually even reversed. After the largest one-week jump in 6 months, mortgage rates registered 6.32% roughly a quarter point higher than recent 2-year lows. The prior drop in mortgage rates had helped revive home purchase sentiment, with an uptick in those saying it’s a good time to buy.
- But we may not see an immediate flood of buyers back to the market as a new record-high—42% of respondents—said that they expected mortgage rates to decline in the next 12 months. Some shoppers may choose to wait for these lower mortgage rates–especially given this week’s higher trend. Even so, mortgage applications for home purchases have continued to trend higher than one-year ago for a 3rd straight week.
- In weekly data from Realtor.com, we see that today’s shoppers face conditions largely similar to recent weeks. In this typically buyer-friendly season, listing prices are steady, and new listings continue to grow, helping to push active inventory higher. Meanwhile, time on market gives shoppers more time to consider options as sellers practice patience.
- Nationwide we’re in the “almost” best time to buy where listings are usually somewhat scarcer than in the best week, but otherwise buyers are still in a good position. However, in San Francisco, Baltimore, and Kansas City, the best week for buyers is coming up next week! Oct 13-19.
- Finally, an analysis of homeowners and mortgages highlights variation that could drive the housing market’s reaction to lower rates. In younger cities where homeownership rates are lower, a greater share of homeowners have mortgage debt, while in markets where homeownership is more prevalent and homeowners are older, a greater share of homeowners own their home outright with no mortgage. As mortgage rates decline, these markets with more widespread mortgage debt could see a greater pickup in housing activity.
- 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 now instagram @realtordotcomecon for graphics.
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