Pacific Equity & Loan

Welcome to our January 2024 Market Update, where we present the most recent insights into the continuously evolving real estate landscape. As we kick off the new year, our commitment is to furnish you with valuable information to guide informed decisions in the dynamic housing market. Within this update, we will explore pivotal trends and significant factors shaping the real estate sphere as we welcome the beginning of 2024.

Monthly Payments for Homebuyers Experience Significant Decline

The median U.S. housing payment has dropped nearly $400 since its October peak, enticing some stalled buyers to re-enter the market. The Demand Index, which measures early-stage demand, is up 10% from the previous month. The median mortgage payment in the United States was $2,361 during the four weeks ending December 31, down $372 (-14%) from its all-time high in October to its lowest level in nearly a year. Early-stage homebuying demand is beginning to rise as buyers take advantage of lower interest rates and more options (new listings are up 10% year over year).

Housing sentiment rises as nearly a third of Americans anticipate lower mortgage rates in the coming year

According to a new Fannie Mae survey, consumers are feeling more optimistic about the U.S. housing market, with an increasing share believing mortgage rates will fall over the next 12 months. The HPSI is based on Fannie Mae’s National Housing Survey, which dates back to 2010. In December, 31% of consumers predicted lower interest rates in the coming year, up from 22% in November.

Hoping To Buy a Home in 2024? Here’s Where Prices Have Been Rising—and Falling—the Most

Last year was a difficult year for the housing market due to a rise in mortgage rates. Despite the large number of eager buyers looking for homes, few properties were listed for sale as homeowners held on to their low mortgage rates. Builders couldn’t build homes fast enough. As a result, sales volume decreased. Even as buyers faced near-record low affordability, they couldn’t seem to get a break. Home prices in New England and the Upper Midwest continued to rise steadily in 2023. The price per square foot in New Hampshire, Vermont, and Ohio increased by approximately 11% last year. They went up 10% in Massachusetts.

Meanwhile, the Mountain West experienced the most significant slowdown in price growth. While the price per square foot increased by about 4.5% last year, it was lower than the roughly 14% annual price increase in 2020, 2021, and 2022. This deceleration was most noticeable in Montana and Wyoming.

Sources: Redfin, Keeping Current Matters, Realtor.com

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