Real estate agents weigh in on U.S. market conditions, interest rates, election impacts and more.
Prospective homebuyers eager to buy a home in the U.S. have been keeping close watch on economic, societal and political factors, wondering how today’s trending topics might impact their real estate transaction.
Whether these homebuyers have been waiting to downsize their longtime dwelling, looking to upsize from a starter home or own a home for the very first time, they may be asking these timely questions before purchasing a home in the remaining months of 2024.
Industry professionals from across the U.S. weigh in on some of the more top-of-mind subjects this fall.
What’s happening in the housing market?
With fall underway, many homebuyers are eager to see how market conditions evolve, both locally and nationally. Factors like lower interest rates could impact momentum going forward, even as recent aggregated data from RE/MAX points to gradually slowing home sales.
The latest RE/MAX National Housing Report, which surveyed 49 U.S. metro areas during August, found that home sales and median sales price were both down from the month prior. New listings were up 7.9% from one year ago, and total housing inventory was up 37.6% year over year. This means fall homebuyers could have more options to choose from when it comes to available properties – and a widened range of choice is always a plus when making such an important purchase.
“While we saw a slight dip in sales month-over-month, the market has shown some resilience with modest year-over-year price growth,” said Amy Lessinger, President of RE/MAX, LLC. “The rise in new listings signals that more homeowners are recognizing the value of listing in today’s environment. Buyers and sellers alike can find opportunity, especially with a steady flow of homes entering the market.”
Opportunity is exactly what Mike Opyd, Senior Vice President of RE/MAX Premier and Broker/Owner of Motto Mortgage NEXT in Chicago, thinks consumers will find in the coming months.“I’m expecting the fall may be a busier market than the summer now that rates have fallen over the past several months and people are back into buying mode after taking the summer off, which is typical in the Chicagoland market,” he shares.
Anna Altic, Managing Broker of RE/MAX Homes and Estates in Nashville, Tennessee, is seeing a stir, too.
“Inventory in Middle Tennessee has moved up toward pre-pandemic levels. Prices have continued to rise because there is still enough buyer demand to absorb the additional inventory. And some sellers are choosing to offer incentives such as rate buy downs in lieu of price reduction,” she says.
“I anticipate that if interest rates continue to decrease, more home sellers with pandemic-era rates may begin to enter the market.”
Will interest rates fluctuate?
Mortgage interest rates remain a factor in keeping some homebuyers on the sidelines, as they hold off on their purchase until monthly payments feel more feasible.
Mortgage rates have been slowly cooling in recent months – and many people are eager to see if this slight downward trail continues. During their mid-September meeting, the U.S. Federal Reserve reduced the federal funds rate by 50 basis points, or a half-percent. While this indicates financial relief for some aspects of the economy, the news doesn’t have a direct impact on mortgage rates, which are more closely tied to the 10-year treasury.
Real estate agents, who get an up-close look at the relationship between rates and homebuying tendencies, are in alignment that a drop in rates would be welcome.
“If mortgage rates decrease, that could increase a borrower’s spending power and allow them to move into new price points,” Altic says. “And many sellers are sitting on more than enough equity to make the move but are waiting for the right conditions.”
Lawrence Yun, Chief Economist for the National Association of REALTORS® (NAR), believes that in the wake of the latest Fed announcement, even though he anticipates further rate cuts from the Federal Reserve in the remainder of 2024 and in 2025, any further decline in mortgage rates will be minimal.
“Due to the already low mortgage rates compared to spring, the purchasing power for home buyers has been lifted by around $50,000 for those with a $2,000 monthly mortgage payment budget. Consumers who were priced out due to earlier higher mortgage rates could now be back in the market,” he said.
Will the U.S. presidential election have an impact on housing?
The 2024 U.S. presidential election will take place Tuesday, November 5, and consumers may be wondering what a change in country leadership – regardless of candidate or party – could mean for the housing market.
Historical data suggests that the market can sometimes see price fluctuation during an election year.
In a recent interview with GoBankingRates, Lessinger said, “Generally speaking, home prices are very resilient and typically rise year over year, regardless of elections. Over the last 40 years, home prices have increased by an average of 4.84% in election years and 4.44% in non-election years.”
Janen Ardia, Broker/Owner of RE/MAX Heritage Properties in Flanders, New Jersey, agrees that a presidential election will likely not have a drastic impact on the housing market.
“I believe there is always an element of the unknown during an election year,” Ardia says. “However, no singular candidate can make or break a housing market. Everyone has to live somewhere and to hesitate because of an election is, in my opinion, unnecessary.”
Why is the help of a real estate agent so crucial – especially right now?
With plenty of change afoot, like the business practice modifications happening as a result of the NAR settlement of seller-initiated class action lawsuits, it’s wise for homebuyers to work with a local, qualified professional for their transaction – one with plenty of experience and a trustworthy reputation.
“We are entering a skills-based market,” Altic says.
“I believe we’re going to see more ‘domino transactions’ where the client will need to sell in order to buy up, which adds an extra level of planning and negotiating for agents. I anticipate a lot more contingencies that will need to be satisfied before we get to the closing table. That will require an agent who can explain the ins and outs of how these contingencies work.”
Navigating contingencies, Ardia agrees, is just one factor in the value brought to the transaction by seasoned professionals.
“No one – and I mean no one – knows the market better than real estate agents,” Ardia says. “It isn’t just about buying or selling a house – it’s about having market insights, understanding statistics, having access to a network of inspectors and appraisers, navigating inspection issues, guiding through negotiation and so much more.”
She adds, “Having an agent with unsurpassed market knowledge is worth everything.”
Article originally appeared on RE/MAX.com.
