The Federal Reserve's September rate cut is anticipated to boost affordability in the coming weeks as rates decline further and housing inventory slowly improves, according to Realtor.com’s Weekly Housing Trends Report for the week ending on September 21, 2024. Researchers believe the market will be teeming with activity just in time for their predicted best week to buy, September 29 to October 5.
Putting expectations aside, the housing market is still a challenging arena for homebuyers, evidenced by the muted buyer activity in August’s report and still-high home prices. Researchers in the report propose that affordable, newly constructed inventory could knock stubborn home prices off their peak.
In October 2023, mortgage rates peaked at 7.79%, which dragged down home shoppers’ buying power; however, recent rate improvements have boosted their buying power by more than $74,000. Essentially, home shoppers can afford a mortgage for a home priced $74,000 higher than it was last October.
Key findings from the weekly report include the median listing price in the U.S. falling by 1% from last year. That marks the 17th week where listing prices either fell or remained unchanged in a summer-long marathon of cooling home prices.
Sellers are adjusting — with 30% slashing their prices to boost activity on their listings — up 0.3 percentage points compared to the same time last year. But they don’t seem too sore about it as the number of home listings shot up 8% year over year.
Most of the country is locked-in with ultra-low mortgage rates. Yet, the current rate is at its lowest level in nearly two years, encouraging sellers to get their home listed and catch some of the Fall buyer activity. The expectation is sellers will budge once the prevailing mortgage rate is more closely matched to their current mortgage rate, “which will likely be the case as rates continue to fall,” researchers claim.
For the 46th consecutive week active inventory increased, with 33.2% more homes for sale than the same week last year. Moreover, the report boasted that there were more homes for sale this week than in any week since January 2020, pre-pandemic. But not for long — the report claims that inventory could soon be swept up by buyers entering the market in the coming weeks.
Currently, buyers are resting on their laurels with homes sitting on the market six days more compared to the same week last year. The annual gap in time-on-market shrank by two days this week compared to last week, suggesting some buyers may already be re-entering the market.
