May '24 Market Update

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