May '24 Market Update

Market Update

May '24 Market Update

MAY '24 MARKET UPDATE

Another Market Slowdown

 Quick Take:

  • Prices have already risen 6.8% over the past three months, landing only 2.2% below the all-time high reached in June 2022. Additionally, the median list price per square foot hit an all-time high in April 2024.
  • Mortgage rates rose nearly a half a percentage point in April due to changing Fed rate cut expectations, hitting the highest level yet in 2024. The Fed has expressed that inflation is taking longer to settle at 2% than originally expected, so higher rates will likely be here for most — if not all — of 2024.
  • Sales fell 4.3% month over month, and inventory rose 4.7%. The combination of rising prices and interest rates priced buyers out of the market, which dropped sales.

The average 30-year mortgage rate began 2024 at 6.62% and has risen to 7.22% by May, marking the third year of elevated rates. Initially, economists predicted rate cuts, but inflation stalled around 3%, causing the Fed to maintain the federal funds rate at 5.25% to 5.50%. This has led to higher mortgage rates, which increased 0.6% this year, with most of the rise occurring in April.

Higher rates have slowed the housing market, decreasing affordability. April saw a 7% rise in monthly home costs, with a 13% increase from January to April. Sales dropped 4.3% last month, an unusual trend for spring, despite a 4.7% rise in inventory. Buyers are becoming pickier as prices rise, leading to an overall market slowdown.

BIG STORY DATA

 

 

 

Let's Talk

You’ve got questions and we can’t wait to answer them.

Set Up Your Search for New Homes

Check It Out