“Mostly, we think the housing market is going to improve over the next half of the year,” Glenn Kelman, chief executive of Redfin, a real estate brokerage site, said on a May 22 appearance on CNBC’s “Money Movers.”
“We’ve hit rock bottom in the first quarter of 2024 and I would expect the housing market to do a little bit better,” Kelman said.
- While experts are forecasting more homes will be available, they said the boost in supply is not enough to solve affordability issues for buyers.
- Interest rates are expected to come down, but not by enough to counteract high prices.
- “It’s a very strange market, and it’s kind of hard to predict,” said Jeff Ostrowski, a housing analyst
In his CNBC appearance, Kelman also pointed out that demand for homeownership remains high, especially among buyers who have been putting off the home purchase for a long time.
“Listings have trended generally upward of late, suggesting to us that a rising number of current homeowners can no longer put off moving,” said Duncan in a release earlier this month. “However, we believe the ongoing affordability challenges are likely to weigh on how quickly these new listings convert to actual sales.”
Many experts believe the Federal Reserve will likely hold interest rates in the upcoming board meeting on June 12. However, the National Association of Realtors forecast a potential interest rate cut by the fall of this year, according to Jessica Lautz, the NAR’s deputy chief economist.
By late September, “perhaps we will start seeing movement on the Fed funds rate,” she said. “That’s at least what our hope is.”
While mortgage rates are forecasted to come down to 6.5% in the fourth quarter, homebuyers may not see much relief given rising home prices amid limited housing inventory, noted Lautz.
“It’s very possible that they’re ending up paying the same mortgage payment because they’re purchasing a home that while has a lower interest rate, has a higher price point,” she said.
‘It’s hard to foresee prices really cooling’
While the housing market has slowed in terms of the number of transactions, prices haven’t soften despite broader expectations, Ostrowski explained.
The median home sale price across the U.S. increased to $392,200, a 4.4% jump from a year earlier, according to Redfin.
“It’s hard to foresee prices really cooling or declining nationally,” said Ostrowski. “It seems likely we’re going to see another record high for home prices this summer.”
IN SUMMARY:
If you want to buy a home, buy NOW. There is no gain by waiting for interest rates to fall, as prices will be higher and you will have lost any equity appreciation that you could have had before the market cools. There will be much less competition as a rate decrease will drive buyers back into the market, thus increasing demand vs supply and an increase in prices is a guaranty.
For more information or to see what you can afford, reach out to Top Producing Lender, Mac Church at 54-455-3898 or mchurch@acmllc.com
