After months of stalled sales and dried up inventory, the housing market may be approaching a turning point, according to HousingWire. Inventory increased by 1.5% on a weekly basis with a total of 562,000 single-family homes available. Although new listings have declined due to a smaller share of sellers in the market than in any recent year, the drop is less severe than during the previous year, suggesting a potential shift in the market.
High mortgage rates have dampened buyer demand, resulting in 6% fewer sales than the previous year, but despite rate increases, consumers are more responsive to changes than absolute levels. As a result, Mike Simonsen of Altos Research expects the market may see improved home sales volume in 2024 if rates remain stable at their current (high) levels.
Although there are just 53,000 new contracts for single-family homes this week and we’re heading into a traditionally slower homebuying season, we might end the year with more sales in the pipeline than the disastrous fourth quarter of 2022.
Consumers are more sensitive to changes in mortgage rates than to absolute levels. Both 2022 and 2023 were marked by sharp increases in mortgage rates. So even if rates stay at 8%, that would imply improving home sales volume in 2024.
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