Weekly Real Estate Monitor for Mar. 25-29

Mortgage interest rates have remained steady in the mid-6% range for a consecutive 16 weeks. The 30-year fixed mortgage interest rate experienced no changes drastic changes or swings this week, starting the week at 6.92% and at 6.91% as of yesterday.

Housing affordability remains a key factor influencing the share of first-time buyers, which last month matched the lowest recorded share since 2008, standing at 26%. Additionally, inventory levels play a crucial role in shaping market dynamics and buyers are hoping for inventory to increase for the Spring market.

Decrease in mortgage interest rates, but little change in mortgage application volume.

The Mortgage Bankers Association reported a decline in its Market Composite Index last week, seemingly unaffected by a slight improvement in mortgage interest rates. The Index, a gauge of loan application volume, experienced a 0.7% decrease on a seasonally adjusted basis compared to the previous week. On an unadjusted basis, the Index dropped by 0.4% compared to the prior week.

Joel Kan, MBA’s Vice President and Deputy Chief Economist, commented, “Mortgage application activity remained subdued last week despite the slight dip in mortgage rates. Although the 30-year fixed rate inched lower to 6.93%, it failed to stimulate borrower demand. Purchase applications remained essentially unchanged, as prospective homebuyers continue to wait for further declines in mortgage rates and increased listings in the housing market. While lower rates may eventually lead to a release of additional inventory as the lock-in effect diminishes, we anticipate this will occur gradually, with rates projected to approach 6% by year-end. Likewise, with rates remaining elevated, there's currently minimal incentive for rate/term refinances.”

Existing home sales increase in February 2024, coinciding with a rise in inventory levels.

The National Association of Realtors (NAR) released a summary of existing-home sales data, indicating a 9.5% increase in housing market activity in February 2024 compared to January 2024. February's existing-home sales reached a seasonally adjusted annual rate of 4.38 million. However, sales for February 2024 declined by 3.3% compared to February 2023.

Inventory of unsold listings at the end of February increased by 5.9% from the previous month, totaling 1,070,000 homes for sale. Compared to February 2023, inventory levels were up by 10.3%. However, it will take 2.9 months to move the current level of inventory at the current sales pace, indicating that demand is outpacing supply making for a strong seller's market.

In February, single-family home sales increased by 10.3%, while condominium sales rose by 2.5% compared to the previous month. However, compared to February 2023, single-family home sales were down by 2.7%, and condominium sales fell by 8.9%. The median sales price of single-family homes increased by 5.6% to $388,700 from February 2023, while the median sales price of condominiums rose by 6.7% to $344,000.

Weekly Highlights:

Inventory Continues to Rise

Inventory has been increasing for the past 5 consecutive weeks. There were 27,071 active listings at the end of this week, which is 8.9% higher than the same week last year as supply has been increasing since mid-February. Active listings were up 1.1% from the previous week.

New Contracts Catching Up to Last Year

The number of new contracts is down slightly from the same week a year ago, but the spring market is approaching when contract activity is expected to increase.

List Prices Remain Steady

The median list price is up 5.2% compared to last year, keeping prices steady even with fluctuations with interest rates.

Daily Rate Index