By Mike Bodeen · 9 September 2024
Pricing Stable – for Now!
Mortgage Rates are at their lowest since April of 2023! The Mortgage News Daily is showing the 30 Year Fixed Rate average is down to 6.27%, while FHA and VA are down to an average of 5.68%!
On top of that, the Fed is expected to drop the Federal Funds Rate by .25 to .50% when they meet next later this month, though what we’re seeing now (rate drops) is in expectation of the rate cut.
All the sales stats are continuing to favor a buyer’s market trend, though the Cromford Market Index continues to run balanced.
Available listings continue to climb, up 6% this last month. Months of Supply is still increasing (3.3 vs 3.0). Listings under contract (7,027 vs 7,159) continue to decrease from last month. Sales per month (5,628 vs 5,916) continue to slide. These numbers should unequivocally support a buyer’s market.
The Annual median sales price per square foot (PSF) is up about 3.2% over the past year. Appreciation for the monthly median (PSF) is up 1.1%. Overall, if we look at pricing over the past year our most fair analysis would be that despite ups and downs, pricing has stabilized.
But this could change shortly. The reason why it will change shortly is that current real estate activity, such as active listings (PSF) and listings under contract (PSF) are showing list price drops lower than the average pricing for sales and homes under contract – this will translate into lower sales prices. This along with lower rates will induce buyers back, though to be fair, at what exact combination of lower pricing and lower rates will this occur? I think sooner than later, especially if we see continued rate dropping.
So, for the near future, this bodes well for buyers, who will be getting lower mortgage rates and what we believe will be a temporary bottom of the market, pricewise.
It will then change back to a seller’s market when increasing amounts of buyers are at the buying table, responding to the positive market conditions – assuming that additional supply does not rise as well.
There’s been rumblings lately that investors are starting to buy back low to moderate priced homes again ($400K). Our regular buyers don’t need that kind of competition.
Finally, dear readers, if you know of someone who’s looking to buy a home in Phoenix Metro, but they’ve heard the latest news that they will have to pay an agent to represent them, that is a partial truth. They need to call Jonathan or I to understand that they can have professional representation affordably.
Market data referenced in this article comes from The Cromford Report.