Winter Is Coming, But The Housing Market Is Thawing: 3 Indicators Suggest 2024 Momentum Is Building – iSh – Benzinga

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As the year draws to a close, the housing market is showing promising signs of thawing after a prolonged freeze in 2023. A trifecta of factors — falling mortgage rates, a surge in new listings and a notable uptick in Redfin agent consultations — points to a potential resurgence in real estate activity.

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Also Read: Housing Market Heats Up: NAR Forecasts 13.5% Surge In Home Sales For 2024

Average Mortgage Rates Down To 6.64%

One of the key indicators of this shift is the decline in monthly mortgage payments. Average mortgage rates dropped to 6.64%, marking their lowest level since May and a significant decrease from the 8% peak in late October.

The median U.S. monthly mortgage payment, standing at $2,472 in the four weeks ending Dec. 17, reflects a $264 reduction from the October peak, though still showing an 11% year-over-year increase. The Federal Reserve’s shift towards more interest-rate cuts has accelerated this decline, providing a glimmer of hope for a soft landing in the economy.

Double-Digit Rise In Homeowners Contacting Agents

A notable development is the increased inventory in the housing market. Redfin reports a double-digit annual rise in homeowners seeking assistance from real estate agents to sell their homes. Redfin agents and mortgage brokers are reporting that buyers are starting to act on lower rates.

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Redfin Economic Research Lead Chen Zhao remains cautiously optimistic, stating that the recent economic data suggests that mortgage rates may have peaked. As buyers return from the holidays, they will find a more extensive selection of homes, and interest rates are expected to remain in the mid-6% range. Nevertheless, the Federal Reserve’s cautious stance leaves a possibility of rates inching back up.

New Listings Up 9% YoY

New listings are up by 9% compared to the previous year, marking the most significant annual increase since July 2021. The drop in mortgage rates, especially within the 3% to 4% range, has likely empowered homeowners to consider selling.

Despite a surge in mortgage-purchase applications, home sales have not yet fully rebounded. While applications have risen by 18% from their November low point, pending home sales are down by 7% year over year. However, it’s essential to consider the typical holiday season slowdown in the housing market.

Anecdotally, the drop in rates is already capturing the attention of prospective buyers, setting the stage for a potentially dynamic and reinvigorated housing market in 2024.

Now Read: US Mortgage Rates Drop To 6-Month Low: A Turning Point For The Housing Market?

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