Real Estate Market Update

Uncertainty has pushed some prospective home buyers and sellers to the sidelines, but we could see some big changes in the housing market very soon!

Despite the Federal Reserve’s massive interest rate cut in September, mortgage rates have steadily climbed to nearly 7%. Combined with the upcoming jobs report, the 2024 election, and the Fed meeting, buyers and sellers are hitting pause.

But once we pass this hurdle, we could see increased activity and even a potential surge of demand if mortgage rates come back down again as experts predict.

If you’re planning to buy or sell soon—get ready!

Want the latest real estate news? Read on!

October Housing Market Trends

Amid volatile mortgage rates and uncertainty, we could see a massive increase in home sales soon.

“There are more inventory choices for consumers, lower mortgage rates than a year ago, and continued job additions to the economy,” says National Association of Realtors (NAR) Chief Economist Lawrence Yun. “Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”

Existing Homes

In September, existing-home sales declined by 1%, while the median home sales price went up 3% year over year to $404,500—the 15th consecutive month of yearly price gains, according to NAR.

Home sales have been “stuck” for the last 12 months, but according to Yun, factors usually associated with higher home sales are developing.

New Construction Homes

Builder confidence continues to edge higher! 

Despite affordability challenges, home builders anticipate that mortgage rates will gradually moderate in the coming months. However, Jing Fu, director of forecasting and analysis for the National Association of Home Builders (NAHB), says new home sales will likely weaken in October due to a recent increase in long-term rates.

Sales of newly built, single-family homes increased 4.1% in September, and the pace of new home sales is also up 6.3% compared to last year, according to the NAHB. The median new home sale price was $426,300, unchanged from a year ago.

Housing Inventory

Inventory keeps climbing, giving buyers more homes to view before making a decision.

The inventory of unsold existing homes rose by 1.5% month over month and was up 23% from a year ago, NAR reported. At the end of September, there was 4.3 months’ supply at the current monthly sales pace.

In the new construction market, NAHB reported that single-family home inventory was up 8% compared to a year earlier. This represents a 7.6 months’ supply at the current building pace. Completed for-sale new homes reached its highest level since 2009

Mortgage Rates

After the Federal Reserve made an aggressive half a percentage point rate cut, mortgage rates came down to just over 6%. However, they’ve recently climbed back up closer to 7%.

According to Freddie Mac’s Primary Mortgage Market Survey, the interest rate for a 30-year fixed-rate mortgage is 6.72%. This marks the fifth consecutive week of rate increases and the highest level since August.

Freddie Mac noted that due to the upcoming jobs report, the 2024 election, and the Federal Interest rate decision, we can expect mortgage rates to remain volatile. The good news is that rates appear to be cresting and are not expected to reach highs seen earlier this year.

DC Housing Market Update

In the D.C. housing market, prices, supply, and the total value of home sales jumped significantly, according to the Northern Virginia Association of Realtors (NVAR) September 2024 market statistics report.

In the NVAR region, the median home price in September was $725,000, up 11.5% from last year. Total sales volume also jumped by 21.5% during the same period. The month's supply of inventory was 1.4 months, slightly higher than the five-year average of 1.3 months.

The D.C. region also had the highest rent increase among major metro areas, according to new data from Redfin. Over the last year, the region's median rent increased by 12% to $2,088. Virginia Beach saw the second biggest increase.

“September was a robust month for our regional real estate market, as consumers had more

choices, bought more, and spent more. Many consumers acted on their desire to make a move

as they realized the equity they could get from selling in this current market and many felt

interest rates may not go down any further,” explained NVAR Board President Thai-Hung

Nguyen.

Housing Market Remains Surprisingly Active

Despite rising mortgage rates, the housing market remains surprisingly active! According to Realtor.com, the number of homes for sale is also the highest since 2019, including the pandemic “boomtowns.”

Higher rates and the upcoming presidential election have caused many prospective buyers and sellers to hit pause, but Redfin noted that the effect is smaller than expected.

Experts also expect mortgage rates to soften, which could spur further activity in the housing market.

By Q4 2025, Fannie Mae expects the 30-year fixed mortgage rate to average out at 6.2%, the Mortgage Bankers Association expects 6%, and Wells Fargo forecasts 5.9%. Realtor.com also expects rates to come down, even as low as the upper 5% range by the end of 2025.

In the near term, NAR deputy chief economist and vice president of research Lauren Lautz says rates should settle into the mid-6% range once we get past the election uncertainty and the Fed’s meeting.

Final Thoughts

If you’re planning to buy or sell in 2025, start prepping now!

Experts predict mortgage rates to come down slightly and increased market activity. More buyers in the market will put upward pressure on home prices, but only moderately.

Now is the perfect time to start thinking about what you need for your next home and start making preparations. Buyers may be up against increased buyer demand, and sellers are taking 47% longer than a month to get their home ready to sell. 

Looking to buy or sell in the DC area? Don’t navigate the complexities of the current housing market alone! Reach out today for expert real estate leadership.