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

Chart of U.S. existing-home prices, with April 2024 estimated at $404,500 and labeled monthly highs and lows.

Chart of U.S. listings and median listing prices per square foot, August 2016–April 2024, with market-period annotations.

Chart comparing weekly 15- and 30-year fixed mortgage rates, January 2022 to February 2024.

Line chart showing existing home sales declining and housing inventory fluctuating from May 2021 to March 2024.

Inflation chart comparing CPI, core CPI, and shelter inflation from March 2020 to March 2024.

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May '24 Market Update

MAY '24 MARKET UPDATE

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