A4 • Friday • September 27, 2024
thegardenisland.com
THE GARDEN ISLAND
HOUSING MARKET TRENDS: RATE RELIEF ARRIVES Erik J. Martin BANKRATE.COM
Leaves aren’t the only things falling this autumn: Mortgage rates are finally heading down, too. And that, combined with a seasonal dip in home prices, is causing some end-of-year excitement among homebuyers and sellers. The median existing-home price was $416,700 in August, per the National Association of Realtors — a record high for August, but still down from $422,600 a month earlier. And average rates for the benchmark 30year fixed-rate mortgage loan have dropped from a high this year of 7.39 percent in May to 6.24 percent in late September. With rates already down more than a full percentage point and more Fed interest-rate cuts on deck, many market-watchers are asking, what do the final three months of 2024 have in store for sellers and buyers? We reached out to a panel of pros for their real estate trends and forecasts.
gage loans this quarter. But Boesel expects the 30-year mortgage rate to average 6.0 percent this quarter. Where home prices are heading
Housing prices have been on the rise for quite some time, and that doesn’t look to change in Q4: Buyers should not expect to see a significant drop in prices before the end of the year. “Home prices should increase this quarter by 3.9 percent year-over-year,” says Boesel. “Continued homebuyer demand bumping up a still-limited supply will push prices up.” Bugnara concurs, predicting that we’ll see home TONY CENICOLA / NEW YORK TIMES prices jump 3 percent to 5 percent over the quarter. Homes in Brick Township, N.J., as seen on July 31, 2019. Dennis Shirshikov, an adseconds those sentiments. ties are more likely to see ing to see average 30-year junct professor of econom“Many buyers have been price cuts compared to fixed mortgage rates in the ics at City University of New waiting on the sidelines to other times of the year. low 6 percent or perhaps the York, also foresees prices repurchase, and many will “But this fourth quarter high 5 percent range,” says maining high — “however, now purchase quickly,” she Ted Rossman, senior indus- you might see slight cooling could be different for a few says. “Therefore, we most reasons,” says Rick Sharga, in certain overvalued martry analyst for Bankrate. president and CEO of CJ Pat- likely won’t see the typical “The path forward for mort- kets,” he says. slowdown in the last three rick Company. “First, the gage rates will depend on Housing inventory months of the year.” housing supply has inthe state of the economy, the job market, what the Fed predictions for Q4 creased nationally. Secondly, Q4 mortgage rate “We’re unlikely to see a does and more. Consider rates have trended down Q4 2024 housing trends: lately — not necessarily low projections that last fall, the average 30- huge wave of homeowners What to expect As of September 25, the listing their properties for year fixed mortgage rate enough to encourage a flood The last quarter of the sale until mortgage rates of new listings, but certainly rate for a 30-year fixed mort- briefly hit 8 percent for the year is usually a slowdown come down significantly — first time since 2000. Now, low enough to entice more gage averaged 6.24 percent period for real estate marprospective buyers to enter versus 5.43 percent for a 15- we’re moving in the right di- probably below 5.5 percent,” says Sharga. However, he year fixed home loan, per kets across the country. Typ- the market. These lower rection — although today’s notes that inventory levels rates, combined with slowBankrate’s latest survey of rates are still much higher ically, home sales tend to are up about 40 percent than they were for most of decrease in the fourth quar- ing home price appreciation large lenders. And housing from last year. “The invenexperts envision rates dipthe past 15 years.” and wage growth that’s fiter and stay subdued until Bugnara anticipates 6.25 spring. During this period, nally outpacing inflation, im- ping even lower over the tory of new homes for sale is percent and 5.625 percent there are usually fewer buy- prove affordability.” rest of the year. actually back to pre-panaverage rates, respectively, “During the next three Molly Boesel, principal ers, the number of homes demic levels, so overall months, we’re probably go- for 30-year and 15-year mort- there’s more to buy,” he for sale declines and proper- economist for CoreLogic,
Pending homes sales in U.S. creep up as borrowing costs drop Michael Sasso BLOOMBERG NEWS U.S. pending home sales ticked up in August from a record low, as falling mortgage rates encouraged some buyers to dip a toe into the market. A measure of contract signings for previously owned homes climbed 0.6 percent to 70.6 last month, according to data released by the National Association of Realtors Thursday. That came in below the median estimate of economists surveyed by Bloomberg, who had the index rising 1 percent. “A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5 percent in August,” NAR Chief Economist Lawrence Yun said in a prepared statement. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.” Realtors are counting on buyers responding to lower mortgage rates, which recently have fallen further to just above 6 percent. But would-be buyers have been slow to return to the market, with sales of existing homes falling to a 10-month low in August. And many homeowners with sub-3 percent mortgage rates on their loans are reluctant to sell, keeping the supply of available homes at roughly threefourths of 2019 levels. In one hopeful sign, the share of consumers who said they plan to buy a home in the next six months rose to the highest level in a year in Conference Board survey data this week, helped by the prospect of further interest-rate cuts from the Federal Reserve. Across the U.S., pending sales rose in the Midwest, South and West, but the Northeast index fell to its lowest point since the start of the pandemic in 2020. Pending-homes sales tend to be a leading indicator for previously owned homes, because houses typically go under contract a month or two before they’re sold.
says. But Shirshikov does not think inventory will grow much more this year, particularly for entry-level homes. “Many homeowners locked into low mortgage rates will continue holding off on selling, restricting supply,” he says. Boesel anticipates the inventory that does arrive on the market to sell fast. “As new supply enters the market, it should quickly exit as homebuyers waiting on the sidelines act quickly,” she says. Strategies for homebuyers, sellers Now that the tea leaves have been read on real estate trends for Q4, how should consumers proceed? If you’re hoping to buy, be sure your finances are in order. “Don’t buy a home before you’re ready,” says Rossman. “Make sure you have a cushion for transaction costs, repairs and maintenance. It’s better to rent for longer than to buy before you are ready.” Still, be prepared to pounce if a great opportunity arises. “Competition for properties should remain brisk in quarter number four, so buyers should be ready to act when they find the home they want to purchase,” Boesel says. “I’d recommend considering less competitive markets where your purchasing power can go further,” says Shirshikov.