Weekly Real Estate Monitor for April 1-5

This week, the job market was released which continues to display robust strength, evidenced by the addition of 303,000 net payroll jobs in March, bringing total job creation to 5.8 million since the pre-COVID peak four years ago. The construction industry saw a rise of 39,000 net new jobs, marking a 600,000 increase from four years ago, indicating forthcoming growth in housing supply.

The increase in employment forecasts a potential rise in future housing demand. However, this surge in jobs may also prompt the Federal Reserve to reassess inflation risks, potentially stalling the decline in interest rates. Wage growth slowed to 4.1% in March after two consecutive years of gains above 5%, which could mitigate consumer price inflation. Mortgage rates are anticipated to remain steady, with no significant decreases expected in the coming months. High budget deficits will impede interest rate declines as government borrowing limits mortgage funding availability.

Mortgage Rates More Stable Amidst rising Prices

After starting the week at 7.05% an d at 6.99% as of yesterday. While lower rates could enhance affordability for prospective buyers, the stability of these rates may alleviate some stress and uncertainty in the home shopping process. With predictable rates, buyers can navigate potential homes with confidence, knowing what to anticipate financially.

As home prices continue to rise, homeowners have the leverage of accrued housing equity with prospective sellers contemplating a move, even with an existing lower mortgage interest rate, might seek advice from professionals to assess the feasible down payment on a new property. Such deliberation could prove advantageous, particularly if their current home no longer suits their needs due to family or employment changes, as lifestyle changes, wants and needs (not financial gain) is the main reason many buy or sell a home.

Weekly Highlights:

Showings Slow Down for the Holiday

The week ending March 31 saw a 19.9% decrease from the previous week and a 27.9% drop in showings compared to the same period last year. This slowdown can be attributed to buyers opting to spend time with family during the Easter holiday rather than looking at homes that particular week and weekend.

Contracts Fall Back Under Last Year's Levels

After being above last year's numbers for one week, contracts fell 6.7% below 2023 levels, landing at 6,082. The large year-over-year decrease can be attributed to the early timing of the Easter holiday this year. However, contract levels are expected to regulate throughout April as low inventory and fluctuating interest rates are still an ongoing obstacle for many homebuyers to navigate.

Active Listings Continue Year-Over-Year Gains

New listings saw a 2.9% decrease from the previous week. Despite the overall market activity slowing down due to the holiday, listings maintained a 5.4% gain over the same week last year. This may indicate that the supply of homes is turning a corner for buyers.

Daily Rate Index

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