More Homes Enter the Market, Easing Pressure for Buyers
The housing market in the US is witnessing a rise in available homes for sale, with a notable 5% increase noted in the four-week period ending on March 17th. This marks the most significant year-over-year surge since May 2023, as reported by Redfin.
According to MPA, this rise in available homes seems to lure buyers back into the market. Mortgage applications are up, and Redfin’s Homebuyer Demand Index (which tracks things like tour requests) also showed an increase of about 9% compared to last month.
While more homes are up for grabs, prices aren’t exactly cooling down. The median home sale price is still 5.3% higher than last year, the second-biggest increase since October 2022. Higher mortgage rates and prices mean the average monthly mortgage payment is just $31 shy of its all-time high.
Good news might be on the horizon, though. Redfin economists expect mortgage rates to slowly decline throughout 2024. This outlook didn’t change much, even after the Federal Reserve’s latest decision to keep interest rates steady.
“Even with recent data presenting a murky picture on how quickly inflation will approach the Fed’s 2% target, the Fed’s reiteration that it still contemplates three rate cuts this year should be good news for the mortgage market, just as the spring buying season is getting into full swing,” said Marty Green, principal at mortgage law firm Polunsky Beitel Green.
“Although the timing of the cuts and when they will commence is still an open question, the fact that the recent uneven inflation data did not appear to alter the Fed’s projection of three rate cuts in 2024 is reason for optimism.”
