Why Now Might Be the Best Time to Buy a Home | 1-Minute Market Update w/ Martin

Is the dream of owning a home slipping away from you? This week, we unpack why now might actually be the perfect time to make your move—despite what the headlines say. With mortgage applications taking a significant dip of 8% compared to last year, there's still a glimmer of hope as they've recently risen by 3%. And guess what? Online searches for homes are up by 11% over the past month, indicating renewed interest despite high prices averaging $389,250. You'll also find out why the increased home inventory—up by almost 18.9%—could be a game-changer, offering you more options and potentially less competition.

But that's not all. We break down the recent surge in mortgage refinancing, skyrocketing by 34.5% just last week, and what this means for you. With the Federal Reserve potentially lowering interest rates soon, thanks to new inflation data showing a significant drop to 2.8%, we could see a spike in home prices. If you're on the fence about buying a home, this episode gives you the crucial insights you need to make an informed decision. Don't miss out on understanding why this might be your best opportunity in a rapidly changing market.

Transcript

Speaker 1: 0:01

Looks like buying a home just got easier this week, but there's a catch. I'll talk about that in a minute. So before that, let's take a look at this week's housing market data. Today is August 16th, 2024, and this is your weekly real estate market update. Well, folks, the housing market is still serving up some interesting twists and turns.

Speaker 1: 0:24

It seems like the initial rush to buy homes might be cooling off for a bit. Mortgage applications are down 8% compared to this time last year. That's a pretty significant drop. While there was a small uptick of 3% this week over last, it doesn't quite offset the bigger picture. Interestingly, more people are browsing for homes. Online Searches are up 11% from last month, but compared to last year there's a 3% decline. So while people are looking, they might be getting a little cold feet when it comes to actually pulling the trigger.

Speaker 1: 1:04

Now let's talk about the cold hard cash involved. The average home price is hovering around a whopping $389,250, just shy of hitting a new record, but we're talking about a difference of $6,750. That's still a hefty sum, and if you think that's bad, some sellers are even more ambitious, asking for an average of $398,248 for their homes. With interest rates hitting a 6.7% last week. The dream of homeownership is getting a bit pricier. The average monthly mortgage payment is now a hefty $2,588. But there's a silver lining for potential buyers Inventory is actually increasing. We're seeing 4.5% more new homes on the market compared to last year. That's a total jump of nearly 18.9 percent in available homes. And homes are spending a bit more time on the market, with an average of 35 days to sell. So while prices are still high and mortgage payments are a bit off a shock to the system there might be a glimmer of hope for buyers out there. More options and potentially less competition can mean some wiggle room in the market.

Speaker 1: 2:31

Now here's what you need to know why. Buying a home just got easier. So mortgage refinancing just saw its biggest spike since the early time of the pandemic, while people jumping at the chance to lower their payments. The Mortgage Bankers Association says refinancing shot up 34.5% last week. Wow, that's insane. Homebuyers also got in on the action, with applications to buy a house rising by almost 2.8%. The rate on a 30-year fixed mortgage dropped slightly to 6.54, while the 15-year rate hit a 5.96, the lowest it's been since last year. Overall, mortgage application, both in buying and refinancing, jumped guys 16.8%, the highest since January of 2023. Even though rates are staying below 7% Half of the US you now need at least $100,000 in income to afford a mortgage with just 10% down payment.

Speaker 1: 3:39

Okay, guys, so I've been talking about this for a minute and here's proof in the pudding, where I said when rates start to come down, prices and the buyers are going to come back in the market. Now we're still seeing prices going up. Now we're still seeing prices going up. As these interest rates continue to come down and they will come down, I believe the feds will drop rates at least twice this year, as the new inflation data this week that came out went below 3%. The new inflation data is at 2.8%, which is a really good thing. The mandate for the feds is to keep inflation at 2% or below. We just hit a 2% handle. They're going to lower interest rates. In my opinion, when these interest rates continue to climb down anything with a five handle in front of it so 5.79, 5.75 interest rates the buyers are going to come right back in the market and it's going to get hot. So this is why I was suggesting a few months ago to go ahead and buy if you can buy, because when these rates come down, if you can afford it, because when these rates come down, the market is going to go up, the prices are going to go up.

Speaker 1: 4:43

Now there's some in the camp, right, that say in the real estate world, that say that rates, when rates come down, prices are going to come down. They have a logic to it. They're saying that when rates come down, a lot more inventory is going to hit the market. There's an argument to that, where sellers now will see the opportunity to sell their property because there'll be more buyers. But I don't know that. I'm in that camp.

Speaker 1: 5:08

I'm in the camp that I think that people that still have those lower interest rates are going to stay there even when rates go down, because prices are going to go up. Yes, demand is going to go up. So where are those people going to go? Right, they might go. You know they now have to go compete for another house. I don't know. I don't think that the rates are going to go, that rates going down is going to mean prices going down. What I do see, though, for sure is rates go down, commercial property values go up, though for sure is rates go down. Commercial property values go up, those that own commercial property become richer, and that's how this real estate market works. And this has been your weekly real estate market update. I'll see you guys next week. Peace out.