December Real Estate Market Update

While the volume of home sales was down due to market seasonality and the early Autumn mortgage rate spike, the underlying economics of the housing market showed signs of significant improvement which could result in an active early 2024.

Mortgage Rate Spike & Decline

After a series of good reports in August through September reporting growth in consumer spending and wages as well as overall economic growth for the country there were market fears the Fed would continue its rate hikes. These fears helped mortgage rates reach heights not seen for more than 25 years peaking at nearly 8.5%.

However, the economic updates from October & November showed more modest economic & wage growth greatly reducing these earlier fears and boosting confidence in realizing a 'soft landing' for the economy where inflation will return to 2% levels, and we'll avoid a significant recession. This shift in market confidence made a dramatic difference for mortgage rates with them steadily dropping to 7.00% to 7.25% by the end of November with further hopes we might see 6% rates return by the end of 2023 or early 2024.

Home Values

While the major shifts in rates caused a large number of buyers to put their plans on hold, they also resulted in a downshift in seller activity with many putting their plan on hold or removing their homes from the market when they were pushed out of affordability of their next home. This downward movement of both buyers and sellers resulted in the market inventory remaining balanced and thus seeing home values throughout much of the region staying stable.

What's Next

We're having a busy November and start of December as these recent market changes and boosted confidence are already bringing clients 'off the bench' and into the game, and we're hearing similar reports from respected colleagues throughout the region and country.

The first Quarter of 2024 will likely be very active with a growth in available homes and many buyers returning to market... both those who put 2023 plans on hold as well as those who are finally recognizing we are not going back to 3-4% mortgage rates anytime in the foreseeable future.

Timing the 2024 Market?

We find there's a distinct advantage for those selling and buying to be at the front end of this activity curve with listings in mid-January through February when there are fewer competitive listings and more active buyers. This helps our sellers get the best price and terms and sets them up to be buyers in March to May when there's more homes to choose from as seasonal inventory builds.

Want to know more? Give us a call at 206-489-4920

email: Info@ReeceHomes.com