Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from various reliable sources and is a weekly accumulation of different data that can drive the real estate market up & down.
Thus, it is fact based and only analyzing the data/trends without regard to political bias.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Items Driving Rates This Week -
August 30th - PCE Inflation Report
September 4th - JOLTS Report
September 6th - Jobs Report
Also look for some volatility today when the FED Chairman speaks after the annual Jackson Hole Economic Meeting - what he says can move the markets one way or the other and there are so many mixed signals in the economy right now, it's hard to know what he'll say.
Regardless this week's data has reduced the chances of a half-point cut to just a quarter point rate cut and from 5 cuts to 3 of these by the end of the year.
Based on that with the recent drop in rates, personally I believe the mortgage-backed securities market has already accounted for this rate cut and don't see another large drop in rates unless the above reports to be released go the wrong way in a significant manner.
Housing Market Data
Recent Data from the National Association of Realtors
While things seem to be stabilizing and that's good thing there are still mixed signals and items that pop-up in which to take note -
Here is one - while history doesn't always repeat itself, trends and repeat trends can't be altogether ignored.
Median Home Prices are contracting and this historically had not been a good indicator for the economy.
I mentioned this last week - one of the issues for housing is affordability - it continues to persist. If first-time homebuyers cannot afford to buy a home it will have a domino effect on the other parts of the market.
For the most part real estate has always been "local" or "regional". In so that while one city or area may be experiencing growth, other areas are not. The COVID years made real estate "national" as for one of those rare times the entire country saw market gains at the same time.
With COVID creating ridiculously low rates my fear is that in many areas we just moved several future years of home purchases into a two year window. It now may take some time for the market to rebalance and return to normalcy.
Along with the passing of COVID we are returning to a time where real estate is "local" or "regional". What's happening in one market may not be happening in another market.
Florida is an example of that - things are not looking good in their condo market.
I know a high-end in realtor and he said business is massively down for him in Nashville - as this chart shows a huge spike in inventory.
Another Example of Diverging Markets Showing the Return to Real Estate Being "Local" or "Regional"
Here's Something I Found Interesting - It's in Texas So Of Course It's The Biggest
Final Thought But An Important One -
If you are looking at buying a home, note that Homeowner's Insurance Rates in many areas including Texas have "Skyrocketed"!
Since insurance is a component of your debt to income ratio, you need to consider that this rise in rates can effect your qualifying for a loan.
In an upcoming issue of the "Weekly Housing & Real Estate Market Thread" we are going to discuss the crisis in the Homeowner's Insurance Market - it's a real issue, for both consumers and lenders.
8 Days Until Game Day - We're Almost There
Always Happy to Answer Questions - Here to Help You & Those You Care About!
Hook 'Em
MH
The data is well researched from various reliable sources and is a weekly accumulation of different data that can drive the real estate market up & down.
Thus, it is fact based and only analyzing the data/trends without regard to political bias.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Items Driving Rates This Week -
- Retail sales soared 1% month-over-month in July, easily beating forecasts of a 0.3% gain and the biggest increase in 1.5 years.
- Jobless claims rose by 4,000 to 232,000 for the week ending August 17th, but the four-week average of claims that smooths out the volatile series ticked down by 750 to 236,000. The number of people receiving benefits after an initial week of aid, or continuing claims, rose 4,000 to 1.863 million for the week ending August 10th.
- The Bureau of Labor Statistics revised previously reported estimates of job creation in the United States, showing that about 818,000 fewer nonfarm jobs were created from April 2023 through March 2024 revealing that the labor market wasn't as hot as initially thought.
- The market has moved from pricing in a 50-bps rate cut in September back to a 25-bps cut and from five 25-bps cuts to four by year-end.
- Existing-home sales grew 1.3% in July to a seasonally adjusted annual rate of 3.95 million, stopping a four-month sales decline that began in March. However, sales slipped 2.5% from one year ago.
August 30th - PCE Inflation Report
September 4th - JOLTS Report
September 6th - Jobs Report
Also look for some volatility today when the FED Chairman speaks after the annual Jackson Hole Economic Meeting - what he says can move the markets one way or the other and there are so many mixed signals in the economy right now, it's hard to know what he'll say.
Regardless this week's data has reduced the chances of a half-point cut to just a quarter point rate cut and from 5 cuts to 3 of these by the end of the year.
Based on that with the recent drop in rates, personally I believe the mortgage-backed securities market has already accounted for this rate cut and don't see another large drop in rates unless the above reports to be released go the wrong way in a significant manner.
Housing Market Data
Recent Data from the National Association of Realtors
- Total housing inventory registered at the end of July was 1.33M units, up 0.8% from June and 19.8% from one year ago (1.11M).
- Unsold inventory sits at a 4.0-month supply at the current sales pace, down from 4.1 months in June but up from 3.3 months in July 2023.
- The median existing home price for all housing types in July was $422,600, up 4.2% from one year ago ($405,600). All four U.S. regions posted price increases.
- Properties typically remained on the market for 24 days in July, up from 22 days in June and 20 days in July 2023.
- First-time buyers were responsible for 29% of sales in July, identical to June but down from 30% in July 2023.
- All-cash sales accounted for 27% of transactions in July, down from 28% in June but up from 26% one year ago.
- Individual investors or second-home buyers, who make up many cash sales, purchased 13% of homes in July, down from 16% in June 2024 and July 2023.
- Distressed sales – foreclosures and short sales – represented 1% of sales in July, virtually unchanged from last month and the prior year.
While things seem to be stabilizing and that's good thing there are still mixed signals and items that pop-up in which to take note -
Here is one - while history doesn't always repeat itself, trends and repeat trends can't be altogether ignored.
Median Home Prices are contracting and this historically had not been a good indicator for the economy.
I mentioned this last week - one of the issues for housing is affordability - it continues to persist. If first-time homebuyers cannot afford to buy a home it will have a domino effect on the other parts of the market.
For the most part real estate has always been "local" or "regional". In so that while one city or area may be experiencing growth, other areas are not. The COVID years made real estate "national" as for one of those rare times the entire country saw market gains at the same time.
With COVID creating ridiculously low rates my fear is that in many areas we just moved several future years of home purchases into a two year window. It now may take some time for the market to rebalance and return to normalcy.
Along with the passing of COVID we are returning to a time where real estate is "local" or "regional". What's happening in one market may not be happening in another market.
Florida is an example of that - things are not looking good in their condo market.
I know a high-end in realtor and he said business is massively down for him in Nashville - as this chart shows a huge spike in inventory.
Another Example of Diverging Markets Showing the Return to Real Estate Being "Local" or "Regional"
Here's Something I Found Interesting - It's in Texas So Of Course It's The Biggest
Final Thought But An Important One -
If you are looking at buying a home, note that Homeowner's Insurance Rates in many areas including Texas have "Skyrocketed"!
Since insurance is a component of your debt to income ratio, you need to consider that this rise in rates can effect your qualifying for a loan.
In an upcoming issue of the "Weekly Housing & Real Estate Market Thread" we are going to discuss the crisis in the Homeowner's Insurance Market - it's a real issue, for both consumers and lenders.
8 Days Until Game Day - We're Almost There
Always Happy to Answer Questions - Here to Help You & Those You Care About!
Hook 'Em
MH
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