Is data showing that home sales are starting to climb?
The latest home sales report from Altos Research shows that home sales are gradually ticking upwards. Pending sales data showed that 69,000 contracts on single-family homes are pending as of last week. That’s up about 3% for the week and 13% when comparing the same week this year to last year.
Also, 22% more sellers are hitting the market this week than the same time last year. Total home inventory is also continuing to build. There are more than 100,000 more homes available this week than the same time a year ago. Homebuyers have more options, and there’s a lot more opportunity to actually sell homes right now than last year.
What are experts saying about mortgage rates?
A recent report from CBS News asked housing and mortgage market experts where they see mortgage rates going during the Spring market. The overwhelming sentiment is that it depends on how swiftly the Federal Reserve decides to move on interest rates.
Matt Dunbar, SVP of Southeast Region at Churchill Mortgage, stated, “While we’re all eager for mortgage rates to head south this spring, I’m inclined to think it’s unlikely, especially with the Federal Reserve maintaining its ‘hold and observe’ strategy for now. Despite their recent communications regarding future rate cuts, expecting a substantial drop in mortgage rates in the short term might be overly optimistic.”
Will Matheson, co-founder and managing partner at Matheson Capital felt that higher rates would last until the late Spring. Matheson said, “I don’t expect mortgage rates to fall until around the June 12th Fed meeting. The Fed isn’t expected to cut rates during their May meeting, which means any real drop in interest rates would not happen until late spring/early summer at the earliest.”
However, Seamus Nally, CEO of TurboTenant, was even more cautious. Nally said, “All signs point to rates dropping by the end of the year though, likely somewhere around 6%. Everyone is expecting the Federal Reserve to cut the benchmark interest rate in the latter half of the year, and once that happens, that is when I expect mortgage rates to start making a solid decline.”
What does the latest down payment data say?
A recent study from Mortgage Professional America took a look at how much homebuyers are putting down this year.
According to their findings homebuyers are making larger down payments these days. Data pulled from February 2024 showed that the median down payment is up 24.1% from a year ago. Last year, the median down payment on a home was about $44,850 a year ago. Fast forward to February 2024, and the median down payment is up to $55,640.
Rachel Riva, a Redfin real estate agent in Miami said, “Homebuyers are doing whatever they can to pull together a large down payment to lower their monthly payments moving forward. The smallest down payment I’ve seen recently is 25%. I had one client who put down 40%.”
Higher down payments are often used to offset higher rates. This can reduce the amount of the loan and make payments more affordable.
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