Real Estate Market Trends: What You Need to Know

Golden House

Some links on this page are affiliate links, which means that if you choose to make a purchase, I may earn a small commission at no extra cost to you. I greatly apprciate your support! 

Written by Daniel

I'm Daniel, a seasoned finance blogger dedicated to demystifying intricate financial concepts. With a background in economics, I translate complex market trends and investment strategies into clear, actionable insights. Through my articulate analysis and practical advice, I empower readers to make informed financial decisions and confidently navigate the dynamic world of personal finance.

July 10, 2024

As a real estate investor or homebuyer, it’s key to stay up-to-date with market trends. This knowledge helps you make smart choices. We’ll cover the main factors affecting real estate and share insights to help you stand out.

The real estate market changes often. Knowing the big trends helps you move through the challenges. We’ll talk about rising home prices, the lack of homes for sale, changes in mortgage rates, and what buyers and sellers want. This guide aims to equip you with the info you need for smart decisions in today’s market.

Key Takeaways

  • Home prices keep going up because of strong demand and not enough homes
  • Mortgage rates have risen, making buying a home harder for many people
  • People moving from cities to suburbs is driving up home prices and demand for single-family homes
  • Experts think the market will get better, but it might take a while for there to be enough homes
  • Knowing the latest real estate trends is key for making good investment and buying decisions

Seasonal Housing Market Cycles

The real estate market in the United States goes through seasonal changes. The busiest times are usually in the spring and summer. This is because families want to move before the new school year starts.

So, more homes sell during these months. This leads to higher prices and more competition among buyers.

Peak Season Trends

June, July, and August are the busiest months for the housing market. They make up about 40% of all sales in a year. During this time, home prices can go up by 10% compared to the quiet months.

People with kids try to move during the summer to avoid school disruptions. This makes summer the best time for moving.

The COVID-19 pandemic changed the usual home sales trends and seasonal real estate patterns. In 2023, home sales started strong and then went down each month. This might keep happening into 2024, with high housing supply and strong buyer competition keeping prices high.

Potential Deviations from Seasonal Norms

Not always does the housing market follow a predictable pattern. In the third quarter of 2024, it might keep seeing high demand and low inventory. This means home prices will stay strong even when it’s not the peak season.

This is because many homeowners are stuck with low mortgage rates. They don’t want to sell and face higher rates later.

Knowing about seasonal housing market cycles helps buyers and sellers. Buyers might get better deals in the off-peak months. Sellers can make more money by listing their homes when it’s busier.

Mortgage Rate Projections

mortgage rates

The Federal Reserve is working to fight inflation, keeping mortgage rates high. The average 30-year fixed rate is about 7% in 2024. Experts think rates will drop a bit, averaging in the high 6% to low 7% over the next three months.

But getting rates below 6% might take until mid-2025. This high rate makes buying homes harder and slows down the housing market. Many buyers can’t afford homes anymore.

Freddie Mac says mortgage rates will stay over 6.5% until the end of 2024. Fannie Mae and the Mortgage Bankers Association also predict rates will be around 6.8% in Q3 and 6.7% in 2025.

The Federal Open Market Committee has kept rates steady at 5.25% to 5.5% for seven meetings. But inflation has slowed down, and prices are stable. This might mean the Federal Reserve will ease its policies, helping mortgage rates drop.

“Forecasters predict that mortgage rates are likely to hover in the high 6 percent range in July, with the average interest rate on a 30-year fixed mortgage at 7.02 percent as of June 26.”

Lower mortgage rates might not come soon, but they could improve in the second half of 2025. This could make buying homes more affordable for buyers.

real estate market trends

housing supply

The real estate market has seen big changes lately. It’s important for buyers and sellers to keep up with these changes. The main trend is the imbalance between the number of homes for sale and the number of buyers.

Even with new homes being built, there are still not enough for sale. This has pushed home prices up. The median price for existing homes hit a record high of $419,300 in May 2024. New homes have helped a bit, but not enough to fix the shortage, especially for first-time buyers.

Many homeowners are not selling because they don’t want to face higher mortgage rates in a new home. Experts say we won’t see more homes for sale until mortgage rates go back down to around 5%. This might not happen until 2025 or later.

This imbalance affects both buyers and sellers. Buyers might face tough competition and pay more. Sellers might get a good deal because of the market. But, the situation can be different in each area. It’s key to look into the trends in your area.

“The real estate market is experiencing a persistent imbalance between supply and demand, with the inventory of homes for sale remaining much lower than needed to meet the high buyer demand.”

Knowing about these trends can help you make smart choices in the real estate market. Whether you’re buying, selling, or investing, understanding the market can give you an edge. It can help you reach your real estate goals.

Housing Inventory Predictions

housing inventory

The real estate market is facing a big challenge: not enough homes for sale. Even with a small increase in homes available, there are still fewer than needed for a balanced market. Experts believe this problem will keep going.

Many homeowners are not selling because they don’t want to give up their low mortgage rates for higher ones. This makes it hard to fix the inventory shortages.

New home construction has helped a bit, but not enough to fill the gap, especially for first-time buyers. Experts say we won’t see more homes for sale until mortgage rates go back down to around 5%. This might not happen until 2025 or later.

“The U.S. remains 4.5 million homes short compared to the previous year, and builder sentiment dipped from 45 to 43 in May, indicating ongoing challenges in new home construction.”

Recent data shows more resale homes are coming on the market, which could slow down home price growth. But, the median price for new homes is now lower than resale homes. This could change how the market works.

The housing market’s recovery depends on solving these inventory shortages. Experts will keep an eye on trends and offer advice to help everyone in the real estate world.

Sun Belt’s Rising Popularity

Sun Belt Migration and Real Estate Boom

The Sun Belt region stretches from California to North Carolina. It’s becoming more popular as people move away from big cities. This Sun Belt migration trend grew during the pandemic and will likely continue.

Now, the Sun Belt houses about 50% of the US population. By 2040, this number could jump to 55%.

Migration Trends

People like the Sun Belt for its lower taxes and affordable housing prices and rents. It also offers more space than big cities. This has led to a real estate boom, with more people wanting homes and apartments.

Real Estate Boom

Cities like Dallas and Tampa are now top spots for real estate investment. Cities like New York and San Francisco see less interest. The Sun Belt’s housing boom is set to keep going. It’s thanks to its growing suburbs and people moving away from the coasts.

The Sun Belt’s popularity means its real estate market is expected to keep growing. This offers great chances for investors and buyers.

Conclusion

The real estate market is dealing with high home prices, not enough homes for sale, and high mortgage rates. These issues make buying homes harder. But, the market is expected to get better, even if we don’t know when exactly.

Experts say we won’t see more homes for sale until mortgage rates go back down to around 5%. This could take until 2025 or later.

So, buyers and sellers need to plan carefully. Buyers should be patient, look for the best mortgage deals, and think about their budget. Sellers should pick the right time to sell and plan for their next move.

The real estate market will keep changing. People in the industry and buyers and sellers need to keep up with the latest news. This includes staying updated on real estate market outlook, housing trends, and adjusting their buyer and seller strategies.

Even with uncertainty ahead, knowing what’s happening now and what might happen can help you make smart choices. By being flexible and informed, you can handle the market’s ups and downs. This way, you can reach your real estate goals.

FAQ

What are the key trends shaping the real estate market?

The real estate market is seeing trends like rising home prices and low inventory. There’s also high buyer demand and increased mortgage rates affecting affordability.

How do seasonal housing market cycles typically play out?

Usually, the market peaks in spring and summer as families move before school starts. But the COVID-19 pandemic changed these patterns.

What are the mortgage rate projections for the coming months?

Mortgage rates are expected to go down slightly. They’ll likely average in the high 6% to low 7% range for the next three months. Getting to sub-6% might not happen until mid-2025.

How are home prices and housing inventory trends affecting the real estate market?

The market has a big imbalance with too few homes for sale. This high demand has kept home prices rising.

When can we expect to see a meaningful increase in housing inventory?

We won’t see more homes for sale until mortgage rates drop to the low 5% range. This might not happen until 2025 or later.

What is driving the popularity of the Sun Belt region?

The Sun Belt, from California to North Carolina, is getting more popular as people leave big cities. This trend sped up during the pandemic and is likely to continue.

Source Links

You May Also Like…

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top