Real Estate Rundown July 2024
July 01, 2024
Photo by Eric Muhr Via Unsplash
Mortgage Rates in U.S. Dip in Late June
Freddie Mac's latest Primary Mortgage Market Survey reveals that as of June 27, 2024, the average rate for a 30-year fixed-rate mortgage in the United States has decreased slightly to 6.86 percent from the previous week's 6.87 percent. This marks a dip from the 6.71 percent average seen a year ago. Sam Khater, Chief Economist at Freddie Mac, noted that this decline represents the lowest level for 30-year fixed-rate mortgages in nearly three months. He expressed optimism about the economy's current robustness by historical standards and expects rates to continue their downward trend throughout the summer. This outlook is anticipated to attract more prospective homebuyers into the housing market in the coming months.
U.S. Home Prices Hit New All-Time High, Pushing Pending Sales Down 5%
In the latest housing market update, pending home sales experienced their largest drop since February, declining by 4.6% during the four weeks ending June 30, 2024. Despite this, prospective buyers can find some positives: there's been a notable increase in new listings, up by 9.9%, providing more options. Additionally, monthly housing payments have decreased by nearly $100 from their peak in April, thanks to declining mortgage rates. The average 30-year fixed mortgage rate recently stood at 6.86%, marking the fourth consecutive week of declines and the lowest level since early April. This environment suggests a potential opportunity for buyers as the market adjusts, although some indicators like the Redfin Homebuyer Demand Index show a year-over-year decline of 17%, indicating subdued buyer interest compared to previous periods.
May 2024 Housing Starts: New Construction Slows As Inventory Accumulates
In May, building permits and housing starts in the U.S. saw declines, reflecting a cautious sentiment among builders amid evolving market conditions. Building permits dropped to 1,386,000 at a seasonally adjusted annual rate (SAAR), down 3.8% from April and 9.5% lower than a year ago. Similarly, housing starts fell to 1,277,000 SAAR, marking a 5.5% decrease from April and a significant 19.3% decline from last year. Single-family housing starts followed this trend, decreasing by 5.2% compared to April and 1.7% year-over-year, with multifamily construction notably down by 51.7% from the previous year due to a surplus in completed apartment buildings. Builders, facing higher long-term interest rates and fluctuating demand, have become more conservative, leading to increased inventory levels and a rise in incentives and price cuts to stimulate sales. This slowdown in new construction could impact housing market dynamics, especially amidst expectations of seasonal acceleration typically seen during this time of year.
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