There are signs that market conditions will be improving.
Mortgage rates dropped steadily over the past seven weeks, averaging 6.61 % for a 30-year fixed mortgage, the week ending Dec. 28.
Here are some 2024 Housing Market Key takeaways of what we will be discussing today:
Low levels of inventory mean that sellers continue to have the upper hand in the
Mortgage rates have come down from their peak but are still high, and steep home prices are dissuading would-be buyers.
If rates were to drop further in 2024, that would spur the market for both buyers and sellers
But first let’s start with our local Market Action Index and explain what that means...
Bend 97701 Median list price $725k with the market action index hovering around 36. This is an increase over last month's market action index of 34. Inventory has decreased to 73, but expect to see this number rise all over Central Oregon the further we get into January. The average days on Market at 127 and 48% have reduced the sales price
Bend 97702 Median list price $842k with the Market Action Index hovering around 38. Similar to last months 37. Inventory has decreased to 114, average days on Market at 96 and 45% have reduced the sales price
Bend 97703 Median list price $1,500,000 with the Market Action Index hovering around 36 less than last month 38. Inventory has decreased to 105, average days on Market at 129 and 46% have reduced the sales price.
Bend’s south end – Oregon Water Wonderland area 97707 median list price was $914k market action index is 31 which is lower than last months 33. Inventory decreased to 42 listed homes with an average of 109 days on the market and 38% decreasing prices
La Pine median list price was $492k with a Market Action Index 36. About the same as last months 35. inventory decreased to 68 listed homes with average 130 days on the market and 26% decreasing prices
Prineville median list price was $471k Market Action Index at 30 same as last months 30, inventory decreased to 82 listed homes with average 159 days on the market and 39% decreasing prices
Redmond’s median list price was $599k with the Market Action Index at 35 a slight decrease from last month 37, inventory decreased to 159 listed homes with average 114 days on the market and 39% decreasing prices
Sisters median list price was $1,225,000 with the Market Action Index at 35 which is same as last month, inventory decreased to 40 listed homes with average 164 days on the market and 38% decreasing prices
Madras median list price was $470k with the Market Action Index at 33 this is less than last months 35, inventory at 41 listed homes with average 128 days on the market and 32% decreasing prices
As I was say earlier - There are signs that market conditions will be improving.
Mortgage rates dropped steadily over the past seven weeks, averaging 6.61 % for a 30-year fixed mortgage, the week ending Dec. 28.
2024 Housing Market Key takeaways
Low levels of inventory mean that sellers continue to have the upper hand in the
Mortgage rates have come down from their peak but are still high, and steep home prices are dissuading would-be buyers.
If rates were to drop further in 2024, that would spur the market for both buyers and sellers.
With home prices historically high and inventory still very tight, many prospective sellers and hopeful buyers are feeling nervous about today’s housing market, but there are still many opportunities for homebuyers in todays market.
As of late December 2023 — mortgage interest rates were still higher than most homeowners’ locked-in rates, but a drop in rates the last few weeks has been a welcome reprieve from the recent 20-year highs.
Home prices, mortgage rates and inventory levels will all shape housing affordability in the coming year with rates roughly doubling since 2022, thanks in part to the Federal Reserve’s war on inflation, they have stayed relatively high for the last year and half. While the Fed does not directly set mortgage rates, mortgage lenders take cues from them, and mortgage rates climbed in tandem with the Fed’s long string of rate hikes.
As long as the economy continues to motor along, the new normal of higher rates is here for a while. The Fed signaled in its December meeting that its war on inflation could end soon, but many predict that buyers will still be feeling the squeeze in 2024. A sharp economic slowdown would bring mortgage rates lower — but we are going into an election year and historically the party in power normally works to create a stable economy with affordability. So it will be interesting to see what happens over all.
Here are some Key housing market stats
The median home-sale price was up 4 percent from one year ago, according to NAR data, which was about the same as the rate of inflation.
Central Oregon had on average a 3.5-month supply of housing inventory as of which is low enough to be considered a seller’s market.
The average rate on a 30-year mortgage was 6.88 percent as of December 20, 2023.
The Fed’s stated goal of the rate of inflation was 2 percent, but we were closer to 4.
Will housing sales decline?
While home prices have more than held firm this year, the volume of home sales has softened considerably. Existing-home sales declined for five months in a row before rising slightly in November 2023 according to NAR data, which represents a 7.3 percent drop year-over-year. However, experts are hoping these trends may pivot in 2024 if mortgage rates continue to dip.
“Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again,” says NAR chief economist Lawrence Yun. At a NAR conference in November, Yun predicted that sales will rise by as much as 15 percent next year.
Redfin doesn’t agree however they are predicting sales to increase ‘a bit’ from last year says Chen Zhao, who leads their economics team qualifies, ‘we are not expecting this to be dramatic, as interest rates are likely to remain above 6 percent.’
The outlook is that declines in mortgage rates will drive more sellers to trade in their existing home and help add much-needed inventory to the market, leading to more transactions.
There are simply not enough homes for sale. For inventory levels to improve significantly, there would need to be either a surge of homeowners listing their existing properties or a huge amount of new-construction homes hitting the market. While both seem relatively unlikely, we may see some increase in housing inventory for 2024. There will be more home construction, and more existing homeowners then may be willing to sell and give up their low mortgage rates.
Will home prices go down?
So will home prices drop in 2024? Probably not. Home prices will most likely stay slightly under our historically 5-8% annual increase to around 3 to 4 percent, Home price appreciation can only moderate from improved supply. A 20-30 percent rise in home construction could be absorbed into our Central Oregon marketplace, with a continued drop in mortgage rates. Though many of our smaller builders are not willing to risk building a lot of spec homes this year. These Spec homes will be coming more from track home builders.
Prices are intricately connected with housing inventory. Sellers are likely to remain reluctant to give up their low interest rate for a much higher one, so inventory will remain tight for existing homes. As time passes, more homeowners may be ‘forced’ to sell due to life events, so inventory may rise from the current levels, but it’s unlikely to increase much. That means that prices are unlikely to fall on a year-over-year basis, unless demand falters.
In today’s market, tight inventory gives sellers the upper hand. There are more buyers than there are homes available, so each home that comes on the market becomes more of a hot commodity than it might if there were more options to choose from. Without a significant uptick in inventory, the seller’s market seems unlikely to change next year.
The current significant shortage of inventory suggests it would be unlikely to be a buyer’s market anytime soon.
Given expectations about interest rates and supply, demand will probably exceed supply
similar to current this past year. Sellers may still find themselves making concessions on
closing costs or rate buydowns in 2024 to get their homes under contract, and buyers should be wary of biting off more than can be financially chewed. Make sure you understand what your monthly payment will be and understand the type of mortgage you are agreeing to. Will
your rate rise or will your monthly payment go up over several years, these are all things to make sure you are aware of when shopping for a home. Home prices are at record highs in most markets, due to increased mortgage rates and increased insurance costs. There are not as many bargains out there as you would expect so make sure you have the mindset to be willing to walk if payments are too much of a stretch
Bottom line on the 2024 housing market
The combination of high mortgage rates, steep home prices and low inventory levels are lining up to make the 2024 housing market a challenge. But rates cooled a bit at the end of 2023 — if that continues in 2024, as some experts predict, then market activity should heat up in response. Some are saying this heat up will last at least until September 2024.
The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of professional broker and Powell Team is just that, we are here to help you navigate and guide you through this market. Feel free to call text or email and we will do our BEST for you.
Comentários