Real estate Rundown September 2024

Photo by Scott Graham via Unsplash

Home Price Growth Continues to Stall

The S&P CoreLogic Case-Shiller U.S. National Home Price Index showed a modest increase of 0.2%, marking a continued slowdown in home price growth. Nationally, home prices rose by 5.4% year-over-year, down from 5.9% in May and a peak of 6.6% in February. Both the 10-city and 20-city indices also experienced slower growth. The cooling trend in home prices reflects cautious buyer behavior amid high mortgage rates, which still averaged above 6.9% for prime borrowers. Additionally, the time a typical home remained on the market increased, signaling a softening in the housing market. Zillow's Home Value Index also mirrored this trend, with slower appreciation observed in June and July. The future impact of recent mortgage rate relief on market competition remains uncertain.

Pending Homes Sales Drop

In July 2024 pending home sales in the U.S. dropped by 5.5%, according to the National Association of REALTORS®. All four regions experienced declines in transactions, with the Northeast showing a slight year-over-year increase, while the Midwest, South, and West saw decreases. The Pending Home Sales Index (PHSI), which measures contract signings as a predictor of future home sales, fell to 70.2, the lowest level since the index's inception in 2001. Year-over-year, pending transactions were down 8.5%. Despite job growth and higher inventory, affordability issues and uncertainty related to the upcoming presidential election contributed to the market's struggles.

Falling Mortgage Rates Have Yet to Improve Home Sales

Pending home sales experienced their steepest decline in nearly a year, falling 6.9% in the four weeks ending August 25, despite the median U.S. housing payment reaching its lowest level in five months. Potential homebuyers are hesitating, waiting for clarity on several factors: the impact of the National Association of REALTORS® (NAR) settlement, potential further decreases in mortgage rates, and the outcome of the upcoming presidential election. While mortgage rates have dropped to a 15-month low, and some buyers are re-entering the market, overall activity remains subdued as many buyers play the waiting game.

Average Mortgage Down Payment Jumps to Record High

Recently the typical down payment for U.S. homebuyers reached a record high of $67,500, a 14.8% increase from the previous year, marking the 12th consecutive month of year-over-year growth. This surge outpaced the 4% rise in home prices, driven by demand for higher-priced, move-in-ready homes and buyers aiming to reduce their mortgage payments amid elevated rates. The trend also reflects increased equity from previous home sales and a rise in all-cash purchases, which comprised 30.7% of sales. Regional variations showed significant increases in down payments in some areas, while a few metros saw declines.

Never miss out on industry trends and mover marketing tips by signing up for our monthly newsletter.