Over the past few years, with high mortgage rates and low sales volume, Love & Company has kept a close watch on the real estate market, always looking to answer the question, “Can our prospects sell their homes at a reasonable value?”
In this update, we take a look at the first four months of 2024 … and find that very little has changed. For our market, this is good news, as home resale values continue to be strong, and the time period in which homes are selling continues to be relatively short. So yes, it continues to be a good time for our prospects to sell their homes—especially those with higher home values, as the National Association of Realtors® (NAR) reported the following in its April release.
- “Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market,” NAR Chief Economist Lawrence Yun said.
- For homes priced $1 million or more, inventory and sales increased by 34% and 40%, respectively, from a year ago.
As we’ve delved into the market in significant depth in past blogs, in this one we will focus on just a few highlights from the April reports. If you’d like to refer back to any of our earlier recaps for more detail, please see the in-depth analysis of six key performance indicators we originally published in February 2023, or explore the overall look back on 2023 we shared in February this year.
Median Home Resale Values
Median home resale values continue to be the highest ever, with the 2024 price of $412,100 being $21,900 higher than in 2023.
The table below shows the median home resale values for the past five years, with 2024 data shown in purple.
Months’ Supply of Homes
The months’ supply of homes for sale has been steadily increasing since late 2021 and continues to increase in 2024. In April, the supply of homes currently on the market would take 3.5 months to sell based on the current rate of sales. This is an increase of just under half a month, both from the beginning of 2024 and from April 2023.
Historically speaking, this is still a relatively low supply, meaning that homes are still selling quickly due to demand being greater than supply. However, this will be something to watch closely over the coming months, as an increased supply may make the market more competitive from a pricing perspective, limiting additional potential growth in home resale prices.
Annual Rate of Sales
While the months’ supply has increased, the 2024 annual rate of sales has not changed meaningfully from 2023. In fact, month-by-month the 2024 pace of sales has almost exactly mirrored 2023.
From a historical perspective, the number of sales continues to be very low. This indicates a limited supply and is part of what is keeping home resale prices high.
So What Is Happening With Interest Rates?
Early in the year, many forecasters were optimistic that the federal funds rate would start declining in 2024, with many projecting June as the first month for a decrease. However, inflation has continued to be “hotter” than the Fed would like, and so now there is uncertainty whether we will see any decreases in 2024.
Mortgage rates, instead of decreasing as expected earlier in the year, have actually been increasing. Whereas the average 30-year fixed-rate mortgage averaged 6.62% back in January, down more than 1% from its late October 2023 peak of 7.79%, as of May 16, 2024, the average was 7.02%. So we may have to wait a good bit longer for mortgage rates to experience any significant declines.
Stay Tuned For Our Next Update
We will continue to monitor these real estate trends and update you on what’s happening. We expect our next update to come in early October when we recap August real estate data.
