Home sales rise in January
Home sales activity in January 2024 were actually higher than they were in August 2023. Sales of previously owned homes were up by 3.1% according to recent data from the National Association of Realtors.
The increase exceeded expectations set by Wall Street. Also, December sales figures were revised upward.
In other data from NAR, the median price of homes rose 5.1% to $379,000 when compared to January 2023. All-cash buyers made up 32% of sales, the highest share since July 2014.
What’s the latest expectation for the Spring market?
A report from Redfin detailed their expectations for the upcoming Spring housing market.
New listings are already up 10% in February compared to last year, and home prices are up 6% year-over-year. Both of these metrics are pointing to a housing market that should be much stronger than what we saw in 2023.
However, this may not be a true sellers’ market. Shauna Pendleton, a Redfin premier agent in Boise, ID, stated, “I tell every one of my sellers to have an open mind and put on their buyer’s hat. Nine times out of 10, buyers are asking for a concession in their initial offer right now–and usually the seller needs to accept it to seal the deal.”
What’s the current expectation for new homebuilding?
An article in the Portland Press Herald detailed how Wall Street is expecting a strong year for home construction. Moody’s Investors Service is projecting a 5% increase in new U.S. home sales. Reasons cited for the strength in the new home market included the strong job market and improved demand among millennial homebuyers.
Carl Reichardt, a homebuilding analyst for BTIG, said, “My expectation for 2024, which is very modest growth in new home sales, really comes from a stabilization in interest rates and continued lack of competition from existing homes.”
Moody’s is also expecting mortgage rates to drop to 6.4% by the end of the year. Several economists were betting on rates heading lower, but none had rates below 6.0% by the end of year.
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