It's not only the leaves which might be falling this fall: mortgage rates of interest are finally falling, too. And that, coupled with a seasonal decline in home prices, is creating excitement amongst homebuyers and sellers because the yr ends.
The average existing property price was $416,700 in August, in keeping with the National Association of Realtors – a record high for August but still down from $422,600 the previous month. And average rates of interest on the benchmark 30-year mortgage loan have fallen from a high this yr of seven.39% in May to six.24% at the tip of September.
Interest rates have already fallen by greater than a full percentage point or more Fed rate of interest cuts On deck, many market watchers are wondering: What do the last three months of 2024 have in store for sellers and buyers? We turned to a panel of experts to learn their real estate trends and predictions.
Real Estate Market Trends within the Fourth Quarter of 2024: What to Expect
The last quarter of the yr is often a slowdown period for real estate markets across the country. Typically, home sales are likely to decline within the fourth quarter and remain subdued until spring. During this time, there are typically fewer buyers, the variety of homes on the market decreases, and real estate prices usually tend to drop in comparison with other times of the yr.
“But this fourth quarter could be different for several reasons,” said Rick Sharga, president and CEO of CJ Patrick Company. “Firstly, housing supply has increased across the country. Secondly, Interest rates have trended downward lately – not necessarily low enough to encourage a flood of new listings, but certainly low enough to entice more potential buyers to enter the market. These lower interest rates, combined with slower housing price growth and wage growth that is finally outpacing inflation, are improving affordability.”
Molly Boesel, chief economist at CoreLogic, supports this assessment. “Many Shoppers waited on the sidelines to buy, and many will now buy quickly,” she says. “Therefore, we most likely will not see the typical slowdown in the last three months of the year.”
Ralph DiBugnara, president of Home Qualified, says these factors combined with the Presidential electionis likely to see a strong move in favor of buyers between October and December. “This means that the fourth quarter of 2024 is likely to be the busiest of the year,” he predicts.
Q4 Mortgage Rate Forecasts
As of September 25, the interest rate on a 30-year fixed-rate mortgage loan averaged 6.24% versus 5.43% for a 15-year fixed-rate mortgage loan Bankrate's latest survey of major lenders. And real estate experts expect interest rates to continue to fall for the rest of the year.
“Over the next three months, we will likely see average 30-year fixed mortgage rates in the low 6% range or perhaps in the high 5% range,” said Ted Rossman, senior industry analyst at Bankrate. “The further development of mortgage rates will depend on the economic situation, the labor market and other factors.” what the Fed is doing and more. Consider that the average interest rate on 30-year fixed-rate mortgages briefly reached 8% last fall for the first time since 2000. Now we are moving in the right direction – although today’s interest rates are still much higher than in most of the past 15 years.”
Bugnara expects interest rates this quarter to average 6.25% and 5.625% for 30-year and 15-year mortgage loans, respectively. However, Boesel expects the 30-year mortgage rate to average 6.0% this quarter. Sharga echoes that prediction, with a caveat: “There is a possibility that it could go below 6% and settle in the high 5% range,” he says.
Where real estate prices are going
Real estate prices have been rising for some time, and nothing is likely to change in the fourth quarter: Buyers should not expect a significant drop in prices before the end of the year.
“Property prices are expected to rise 3.9% year-on-year this quarter,” says Boesel. “Continued homebuyer demand adding to the still limited supply will drive prices higher.”
Bugnara agrees, predicting property prices will rise 3% to 5% over the quarter.
Dennis Shirshikov, an associate professor of economics at the City University of New York, also expects prices to remain high – “although there could possibly be a slight slowdown in certain overvalued markets,” he says.
Housing inventory forecasts for the fourth quarter
“It is unlikely that we will see a large wave Homeowners listing their properties for sale until mortgage rates drop significantly – probably below 5.5%,” says Sharga. However, he notes that inventory levels are up about 40% compared to last year. “The inventory of new homes for sale is actually back to pre-pandemic levels, so there is more to buy overall,” he says.
But Shirshikov doesn't expect inventories to rise any further this year, especially for entry-level homes. “Many homeowners locked into low mortgage rates will continue to hold off on selling, limiting supply,” he says.
Boesel expects the inventory that comes onto the market to sell quickly. “As new supply comes onto the market, it should disappear quickly as wait-and-see homebuyers act quickly,” she says. It forecasts that inventory for sale should be about 15% to 20% above 2023 levels.
Strategies for Home Buyers and Sellers
What should consumers do now that they have read the initial information on Q4 real estate trends? If you are planning a purchase, make sure your finances are in order.
“Not buy a house before you’re ready,” Rossman says. “Make sure you have a cushion for transaction costs, repairs and maintenance. It’s better to rent longer than to buy before you’re ready.”
Still, be prepared to pounce when an awesome opportunity presents itself. “Competition for real estate should remain brisk in the fourth quarter, so buyers should be ready to act once they find the home they want to buy,” Boesel says.
“I would recommend considering less competitive markets where your purchasing power may be greater,” says Shirshikov. And if fewer buyers than expected enter the market this season, “you may find some good deals, especially from sellers who are more motivated to close before the end of the year.”
Meanwhile, sellers should consider the next aspects:
- Local market conditions: “Know what’s happening in your local market,” says Sharga. “When homes are selling quickly and prices are rising, it's probably a good time to list them. However, if you see inventory increasing, homes staying on the market longer, and prices decreasing, it may make sense to wait until spring to list your home for sale.”
- Competitive prices: “Even in a seller’s market, buyers are sensitive to high mortgage rates,” says Shirshikov. “Overvaluing your property could cause it to stay on the market longer. If necessary, consider incentives such as: B. covering closing costs to make your listing more attractive.”
- Where you’ll live next: “You can probably get a good price for what you're offering, but for what comes next you may have to pay more than you want,” says Rossman. “And your mortgage rate could be much higher than you’re used to, even if rates are already starting to fall. “Sweet spots” are downsizing empty nesters and other people leaving higher cost markets for lower cost markets. On the opposite hand, trading higher in an identical market is pricey.”
©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.
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