More houses hit the market, but home price and rate concerns linger
The US housing market is seeing more homes available for sale, with a 5% increase recorded in the four weeks ending March 17th. That's the biggest year-over-year jump since May 2023, according to a report by Redfin.
Even better, the number of newly listed homes has shot up 15%, the largest increase since June 2021.
This rise in available homes seems to lure buyers back into the market. Mortgage applications are up, and Redfin's Homebuyer Demand Index (which tracks things like tour requests) also showed an increase of about 9% compared to last month.
While more homes are up for grabs, prices aren't exactly cooling down. The median home sale price is still 5.3% higher than last year, the second-biggest increase since October 2022. Higher mortgage rates and prices mean the average monthly mortgage payment is just $31 shy of its all-time high.
Read next: Market opportunity exists with or without Fed cuts: top loan officer
Good news might be on the horizon, though. Redfin economists expect mortgage rates to slowly decline throughout 2024. This outlook didn't change much, even after the Federal Reserve's latest decision to keep interest rates steady.
“Even with recent data presenting a murky picture on how quickly inflation will approach the Fed’s 2% target, the Fed’s reiteration that it still contemplates three rate cuts this year should be good news for the mortgage market, just as the spring buying season is getting into full swing,” said Marty Green, principal at mortgage law firm Polunsky Beitel Green.
“Although the timing of the cuts and when they will commence is still an open question, the fact that the recent uneven inflation data did not appear to alter the Fed’s projection of three rate cuts in 2024 is reason for optimism.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
