Nearly two full months into 2024, inflation still threatens pent-up demand. As inflation flirted with the Fed’s 2% goal, consumer sentiment also improved. Buyers are increasingly optimistic about the prospect of a soft landing that brings with it job security, lower inflation, and lower interest rates. Even Fed Chairman Jerome Powell expressed some cautious optimism. “Growth is going on at a solid pace,” Powell told 60 Minutes in early February. “With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully.”
Long-term consumer confidence is high
Better news came from Fannie Mae’s Home Purchase Sentiment Index, which increased in January to its highest point since March 2022. Given the rate climate, what’s most important is that respondents expressed more confidence in job security: 82% of respondents said they’re not concerned about losing their job in the next 12 months — up from 75% in December. Another bright spot: 60% of respondents said they think it’s a good time to sell.
How a rate dip shows up in the numbers
Key stat: The average 30-year rate moved down to 6.60% in mid-January.
Unfortunately, it’s only been up since then. Still, many markets got a welcome bump this year thanks to the rate drop in late ‘23 and early ‘24. Recently, new listings ticked up, especially in California (San Diego, Riverside, and Sacramento) and Florida (Miami and Tampa) metro areas.
Homes moved quickly in the Northeast for the first month of the year. Hartford, Boston, Columbus, and Washington, D.C. all saw the average home go pending in 10 days or less. Seattle, San Jose, and Richmond, VA, also experienced fewer days-to-pending than elsewhere in the country.
Mortgage applications, while still below last year, have increased in January — well before the start of the spring home shopping season.
The slightly lower rates lasted into January, but jolted upward in early February. While Zillow economists don’t predict a major drop in rates this year, it’s not out of the question that rates could ease as inflation cools. So long as inflation continues to moderate, and the labor market holds up, activity should increase compared to this time last year. Supply was the constraint in 2023. That’s improving; new listings are 6% higher than a year ago.
What to expect in coming months
Rates aside, many early indicators point to a competitive home shopping season. Attractive listings will move quickly. Demographic factors and a strong economy mean a large number of millennials and baby boomers are looking for houses, even while affordability issues remain. There’s good news on the supply side too: We already have more listings than we had a year ago.
For sellers, it is important to work with someone who knows the local market conditions and can price their home correctly. Sellers should make their home stand out by upping its online and offline curb appeal. Bidding wars are already happening for attractive properties priced right.
At HARRIS+GASPER | Lake Chelan Real Estate we take a team approach to our business as our clients deserve the full service and attention that only a team of experts can consistently provide. We are high-touch brokers known for our extensive market knowledge, work ethic and unmatched devotion to our clients.
Whether you’re thinking about buying or selling a home, our goal is to get to know you and learn more about your vision and goals. We ask a lot of questions and do a lot of listening. In today’s competitive real estate market, having an agent with quick execution, an acute sense of value, and a high level of negotiation skills is essential. We pride ourselves in understanding our client’s goals and making things happen.
Want to learn more? We would love to hear from you! Send us a message and we’ll get right back in touch.
