{"id":4465,"date":"2024-02-01T12:12:05","date_gmt":"2024-02-01T12:12:05","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/02\/01\/were-at-a-turning-point-is-the-housing-market-finally-thawing-or-is-another-deep-freeze-to-come\/"},"modified":"2024-02-01T12:12:05","modified_gmt":"2024-02-01T12:12:05","slug":"were-at-a-turning-point-is-the-housing-market-finally-thawing-or-is-another-deep-freeze-to-come","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/02\/01\/were-at-a-turning-point-is-the-housing-market-finally-thawing-or-is-another-deep-freeze-to-come\/","title":{"rendered":"\u2018We\u2019re at a Turning Point\u2019: Is the Housing Market Finally Thawing\u2014or Is Another Deep Freeze To Come?"},"content":{"rendered":"

<\/a><\/p>\n

Photo-illustration by Realtor.com. Source: Getty Images<\/p>\n

<\/p>\n

After a particularly rough stretch<\/a>, the frozen housing market has begun to thaw.<\/p>\n

Mortgage rates have tumbled, more homes are being listed, and sales are rising as buyers are pouncing on their sudden change in fortune.<\/p>\n

\u201cThe worst is over for the housing market,\u201d says Mark Zandi<\/strong>, chief economist at Moody\u2019s Analytics. But \u201cit will take a number of years for the housing market to fully normalize.\u201d<\/p>\n

Indeed, the signs of a gradual sea change have been abundant in the past two months.<\/p>\n

In December, mortgage rates dropped from above 7% to the mid-6% range\u2014a consequential event that jump-started home sales.<\/p>\n

Mortgage applications spiked 34% in the week ending Jan. 19 compared with four weeks earlier, according to the latest Mortgage Bankers Association data.<\/p>\n

From November to December, the number of new-home sales rose 8%<\/a> and pending home sales<\/a> were up 8.3%. (This was according to the most recent data from the U.S. Census Bureau, the U.S. Department of Housing and Urban Development, and the National Association of Realtors\u00ae.)<\/p>\n

And while mortgage applications were still down 17.6% year over year, new-home and pending sales were positive on an annual basis. Year-over-year new-home sales rose 4.4%, while pending home sales ticked up more modestly at 1.3%.<\/p>\n

\u201cWe\u2019re at a turning point,\u201d says Realtor.com\u00ae<\/a> Chief Economist Danielle Hale<\/strong>. \u201cThis could be a sign that the market is opening up, and we could see more people moving and [buying and selling] this spring.\u201d<\/p>\n

She is hesitant, however, to declare the housing market has made a full comeback. The resale market didn\u2019t fare as well in December: Sales of existing homes<\/a> (which excludes new construction) dipped 1% in December from November and dropped 6.2% from December 2022, according to NAR data.<\/p>\n

It\u2019s also important to remember that winter is typically a slower time for the real estate market. And when comparing this period with the previous year, which was sluggish, it doesn\u2019t take much of an uptick to make headlines.<\/p>\n

\u201cThe market is definitely flashing positive signs,\u201d Hale says. \u201cIt\u2019s not a guarantee that we\u2019ll continue to see this positive momentum moving forward. A lot depends on what happens with mortgage rates.\u201d<\/p>\n

Mortgage rates are driving the housing market<\/h2>\n

The improvement in the housing market is largely due to lower mortgage rates. The lower the rate, the cheaper the monthly mortgage payment\u2014making the idea of buying a home more attractive.<\/p>\n

\u201cLower mortgage rates seem to be energizing the housing market,\u201d says Charlie Dougherty<\/strong>, a senior economist at Wells Fargo who specializes in real estate.<\/p>\n

Mortgage rates are expected to continue to come down<\/a> if the U.S. Federal Reserve cuts its own interest rates several times this year as predicted. (Mortgage rates are separate but often follow the same trajectory as the Fed\u2019s rates.) But many economists believe they will remain above 6% this year\u2014and they\u2019re likely to be volatile.<\/p>\n

\u201cThey\u2019re going to drop down and people are going to get excited, and then [rates] are going to bounce back up,\u201d predicts Hale.<\/p>\n

Even with a lower rate, buying a home this year won\u2019t be cheap. Rates are still well above the mid-2% lows seen in 2021\u2014and home prices are high. The median list price was $410,000 in December, according to the most recent Realtor.com data.<\/p>\n

\u201cAffordability is still likely to be an issue for buyers,\u201d says Dougherty. \u201cHome prices look like they\u2019re still on the rise.\u201d<\/p>\n

More homes are going up for sale<\/h2>\n

One of the biggest obstacle in the housing market has been the severe shortage of homes for sale<\/a>. There are many more buyers eager to find a place of their own than there is available housing.<\/p>\n

Fortunately, more homes have been coming on the market in recent weeks. The number of active listings rose<\/a> 8.6% in the week ending Jan. 20 compared with a year earlier, according to Realtor.com data<\/a>.<\/p>\n

That\u2019s a result of homeowners deciding that it\u2019s time for them to list their properties and get on with their lives. The lower rates of the past month likely helped to nudge them in that direction.<\/p>\n

Builders are also doing their part. The National Association of Home Builders expects a 5.5% increase in single-family home construction this year compared with 2023.<\/p>\n

\u201cIt looks like residential construction has bottomed out, and things are looking better this year,\u201d says Danushka Nanayakkara<\/strong>, the assistant vice president for forecasting at the NAHB. \u201cThe housing market is going to stabilize.\u201d<\/p>\n

Home sales are revving back up again<\/h2>\n

After several years of brisk home sales during the COVID-19 pandemic\u2014when everyone seemed to know multiple people who purchased a home\u2014 the housing market stalled as mortgage rates rose.<\/p>\n

Last year, there were the fewest home sales since 1995, according to the NAR. (Only existing homes were included in the tally.) More people bought homes in the depths of the Great Recession\u2014that\u2019s how bad it was.<\/p>\n

\u201cIt\u2019s likely that sales have hit the bottom,\u201d says Hale.<\/p>\n

Now, the tide has begun to turn. But it\u2019s anyone\u2019s guess how quickly it will take for the market to fully rebound.<\/p>\n

\u201cThings are going to get better this year,\u201d says Nanayakkara. \u201cEverybody is feeling optimistic.\u201d<\/p>\n

Real estate broker\u00a0Matt<\/strong> Curtis<\/strong>, whose eponymously named firm is in the Huntsville, AL, area, says he\u2019s already noticed the shift.<\/p>\n

Since December, more homeowners have listed their properties and open houses are once again filled with eager buyers.<\/p>\n

\u201cPeople are getting accustomed to not having 3% and 4% [mortgage] interest rates,\u201d he says. \u201cThey\u2019re just ready to move on.\u201d<\/p>\n

These are positive steps for a housing market that stagnated for most of 2023, even if affordability remains a challenge for many would-be buyers.<\/p>\n

\u201cThe housing market will be a more normal type of year that looks a lot more like what we saw in 2018 and 2019,\u201d says Dougherty. \u201cThat said, it\u2019s still likely to be rather sluggish.\u201d<\/p>\n

The post \u2018We\u2019re at a Turning Point\u2019: Is the Housing Market Finally Thawing\u2014or Is Another Deep Freeze To Come?<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Photo-illustration by Realtor.com. Source: Getty Images After a particularly rough stretch, the frozen housing market has begun to thaw. Mortgage rates have tumbled, more homes are being listed, and sales are rising as buyers are pouncing on their sudden change in fortune. \u201cThe worst is over for the housing market,\u201d says Mark Zandi, chief economist…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":4466,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/4465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=4465"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/4465\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/4466"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=4465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=4465"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=4465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}