Nov 24 2024 5 mins 1
The current state of the US housing industry is characterized by a slowdown in demand and a modest increase in home prices. According to the S&P CoreLogic Case-Shiller Index, home prices rose by 4.2% year-over-year in August 2024, marking the 15th consecutive all-time high[4]. However, the growth rate has significantly slowed down compared to the previous year's 19.28% increase[1].
The decline in mortgage rates in July gave a slight boost to home sales, with total home sales rising 2.6% over the month to 4.7 million[2]. However, pending home sales declined 5.5% month-over-month in July, indicating that affordability challenges continue to impact the market. The homebuilder confidence index fell further to 39 in August, indicating poor building conditions over the next six months[2].
The housing inventory remains tight, with a 4.3-month supply of existing homes as of September 2024, which is still short of the 5 to 6 months needed for a balanced market[4]. The median sale price for an existing home in the US was $404,500 in September 2024, the highest September median ever recorded by the National Association of Realtors[4].
The rental market is also experiencing a slowdown, with an estimated 8.9% vacancy rate, up from 7.5% in 2020[3]. The average effective rent for apartments increased by only 1% in the past year, compared to an average annual growth of 7% in the previous two years[3].
Industry leaders are responding to the current challenges by highlighting the need for lower mortgage rates to spur home sales activity. According to Selma Hepp, chief economist at CoreLogic, "Lower mortgage rates would help spur home sales activity... declines in mortgage rates would drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions"[4].
Compared to the previous reporting period, the housing market has continued to slow down, with home sales declining by 3.5% from last year[4]. However, the modest increase in home prices and the slight boost in home sales in July indicate that the market is still resilient.
In conclusion, the US housing industry is currently experiencing a slowdown in demand and a modest increase in home prices. The tight housing inventory and high mortgage rates continue to impact the market, but industry leaders are optimistic that lower mortgage rates could spur home sales activity. As the market continues to evolve, it is essential to monitor the latest trends and developments to make informed decisions.
The decline in mortgage rates in July gave a slight boost to home sales, with total home sales rising 2.6% over the month to 4.7 million[2]. However, pending home sales declined 5.5% month-over-month in July, indicating that affordability challenges continue to impact the market. The homebuilder confidence index fell further to 39 in August, indicating poor building conditions over the next six months[2].
The housing inventory remains tight, with a 4.3-month supply of existing homes as of September 2024, which is still short of the 5 to 6 months needed for a balanced market[4]. The median sale price for an existing home in the US was $404,500 in September 2024, the highest September median ever recorded by the National Association of Realtors[4].
The rental market is also experiencing a slowdown, with an estimated 8.9% vacancy rate, up from 7.5% in 2020[3]. The average effective rent for apartments increased by only 1% in the past year, compared to an average annual growth of 7% in the previous two years[3].
Industry leaders are responding to the current challenges by highlighting the need for lower mortgage rates to spur home sales activity. According to Selma Hepp, chief economist at CoreLogic, "Lower mortgage rates would help spur home sales activity... declines in mortgage rates would drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions"[4].
Compared to the previous reporting period, the housing market has continued to slow down, with home sales declining by 3.5% from last year[4]. However, the modest increase in home prices and the slight boost in home sales in July indicate that the market is still resilient.
In conclusion, the US housing industry is currently experiencing a slowdown in demand and a modest increase in home prices. The tight housing inventory and high mortgage rates continue to impact the market, but industry leaders are optimistic that lower mortgage rates could spur home sales activity. As the market continues to evolve, it is essential to monitor the latest trends and developments to make informed decisions.
