Homebuying demand shows signs of rebound
According to recent data from a major home listing and real estate service, a double-digit increase in new listings and mortgage rates cooling off have started to bring house hunters back into the market.
New listings showed a 12% increase when comparing last week to the same time period last year. This indicates that there may be increased available inventory to start the year, and that may help the housing market get off to a quicker start than last year.
Also, there’s an available housing supply on the market that should be enough to satisfy demand for 3.6 months. That’s actually up from last year’s 3.4-month mark at the same time period.
Is there a ‘magic number’ for mortgage rates?
Ken Shinoda, a portfolio manager with DoubleLine Capital, recently developed a case study that focused on the levels that mortgage rates need to be in 2024 to loosen the tight housing market.
The case study stated, “There is a magic number for fixed mortgage rates that I think would unfreeze the housing market – in other words, a price bringing together willing buyers and sellers, a market-clearing price. By my lights, that number has a 5% handle.”
Lower rates would make it easier for homeowners who are currently locked into mortgages with rates in the 3%-to-5% range to list their homes. Shinoda said, “In today’s context of frozen inventories, lower rates can potentially revive transaction activity and softener stubborn prices.”
How will housing prices in Denver change in 2024?
A recent feature in the Denver Business Journal detailed how the housing market in the Denver metro area may perform in 2024.
According to the forecast, home prices in and around the Denver area are expected to decline by 5.1%, and sales are projected to be 15.1% lower than 2023. Additional data on renting vs. buying in Denver, shows that it’s currently cheaper to rent than buy.
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