September 20, 2024
- The Realtor.com庐 economics team update gives you the relevant economic and real estate information you need to know each week every Friday to navigate the housing market as a homebuyer, home seller, or industry professional.
- For the week ending Friday September 20, Chief Economist Danielle Hale recaps how the Fed met and made a big cut, dropping its short-term policy rate by 50 basis points. Importantly, the Fed expects that more cuts are likely ahead.
- This means we could see mortgage rates move modestly lower. In fact, mortgage rates tied a 2-year low this week at roughly 6.1%.听
- Realtor.com Sr. Analyst Hannah Jones found that relative to its October 2023 peak, the rate drop could be used to save more than $300 per month or add more than $70,000 in purchasing power. And if mortgage rates get down to 6%, purchasing power could grow by another $9,000.
- Home shoppers appear to be waiting for lower rates. Existing home sales slid further in August. Weekly data from Realtor.com show that asking prices continue to tick lower as time on market creeps higher.听
- Building permits and starts are both up for single-family homes in August. Furthermore, in a first-ever Realtor.com New Construction Insights report, Joel Berner found that builders are focusing on smaller homes, perhaps in an effort to address waning housing affordability. And in state by state rankings, the Carolinas lead the way in terms of the availability and affordability of newly built homes.
- Economist Jiayi Xu found some good news for renters: Easing rents and rising incomes improved rental affordability nationwide and in 39 of 50 markets according to the Realtor.com August Rental Trends Report. There are still markets where affordability is a challenge, but the improvement is welcome.
- You鈥檒l find all the details including full reports and our housing data for download at Big gaming/research.听 You can also follow us on (formerly) for real time updates. And now @realtordotcomecon for graphics.
VIDEO TRANSCRIPT:
- 滨鈥檓 Danielle Hale, Chief Economist at Realtor.com庐. And here鈥檚 what you need to know about the economy and housing market this week!
- The Fed met and made a big cut, dropping its short-term policy rate by 50 basis points. This was likely a hotly debated decision and there was one dissenter who preferred a smaller quarter point cut. Nonetheless, the Fed expects the larger cut helps drop the policy rate closer to neutral so that it is imposing less restriction on economic growth. Importantly, the Fed expects that more cuts are likely ahead, but Chair Powell emphasized that the committee is not in a rush. In fact, markets are currently pricing in 75 basis points of easing by the end of the year while the Fed projections imply just 50 basis points.
- This means that we could see mortgage rates move modestly lower, but the main benefit of the Fed鈥檚 rate cut this week is already baked in. To underscore that, mortgage rates tied a 2-year low this week registering roughly 6.1%.听
- Lower mortgage rates can benefit shoppers in one of 2 primary ways. 1) they can drop monthly payments for the same-priced home or 2) they can be used by buyers to afford a bigger price for the same monthly budget, or some blend of these options.听
- Realtor.com Sr. Analyst Hannah Jones found that relative to their October 2023 peak the drop could be used to save more than $300 per month or add more than $70,000 in purchasing power.听 And if mortgage rates get down to 6%, purchasing power could grow by another $9,000 with even bigger savings in pricier markets.
- It appears that shoppers may be waiting for lower rates. Existing home sales slid further in August even as the median sales price crept higher.
- Weekly data from Realtor.com show that home sellers are noting the more sluggish market, and asking prices continue to tick lower as time on market creeps higher.
- Builders, however, are trying to get ahead of a potential increase in shoppers, with permits and starts both up for single-family homes in August.听
- Furthermore, in a first-ever Realtor.com New Construction Insights report, Joel Berner found that builders are focusing on smaller-footprint homes, perhaps in an effort to address waning housing affordability.听
- And in state by state rankings, the Carolinas lead the way in terms of the availability and affordability of newly built homes.
- Finally, Economist Jiayi Xu found some good news for renters. Easing rents and rising incomes improved rental affordability in 39 of 50 markets according to the Realtor.com August Rental Trends Report. There are still markets where affordability is a challenge, but the improvement is welcome.听
- You鈥檒l find all the details including full reports and our housing data for download at Big gaming/research.听 You can also follow us on (formerly ) for real time updates. And now @realtordotcomecon for graphics.
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