Is Now the Time to Buy or Wait? | 1-Minute Market Update w/ Martin

Is the real estate market turning colder than the approaching autumn breeze? On this week's real estate market update, airing on August 23rd, 2024, we tackle head-on the perplexing trends in the housing market. Mortgage applications are on a downward spiral, dropping 5% from last week and a significant 8% from last year. This episode unearths the curious paradox of fewer active home searches despite more Google inquiries—and what this means for both buyers and sellers. We examine the current price landscape, where the average home now demands nearly $390,000 and the typical monthly mortgage payment has inflated to $2,587, spurred by interest rates at 6.49%.

But that's not all—find out why homebuyers are hesitating, leading to unprecedented spikes in home availability and canceled purchase agreements. With active listings surging and new constructions plummeting by 6.8% since July, the market is more complex than ever. Should you wait for rates to drop further or seize the current opportunities? We dissect expert opinions, explore broader economic factors like job creation and unemployment, and predict the future trajectory of the housing market. Tune in for practical advice and critical insights that could shape your next big real estate move.

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Transcript

Speaker 1: 0:29

Are homebuyers getting cold feet this week?

Speaker 1: 0:31

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 23rd 2024, and this is your weekly real estate market update. So here's the lowdown Fewer people are buying houses right now.

Speaker 1: 0:49

The number of folks applying for mortgages has dropped by 5% this week compared to last week and it's down by a whopping 8% compared to this time last year. Now you might be thinking wait, doesn't that mean more houses are available? Well, kind of more people are Googling homes for sale, but there are actually fewer people searching compared to last year. So there's a bit of a disconnect here. Let's talk about prices. The average price tag for a house is now a whopping $390,000. And if you're thinking of selling, sellers are asking for an average of $397,388. If you were to buy a house right now, the average monthly mortgage bill would be a hefty $2,587, thanks to interest rates sitting at 6.49%. But here's some good news there are more houses on the market now compared to last year. The number of new homes have jumped by 3.4%. Homes have jumped by 3.4%. That means houses are staying on the market longer, and the average time to sell a house is now 35 days, which is six days longer than last year. So are homebuyers getting cold feet.

Speaker 1: 2:03

With rising prices and economic uncertainty, many potential homebuyers are backing out of deals at a record pace. This is causing a surge in the number of homes available on the market. Mortgage rates have dropped, but home prices remain high. Active home listings rose a record 13.7% year over year in July, while a record 59,000 canceled home purchase agreements during the month, accounting for 15.8% of homes under contract. Mortgage rates are touching annual lows, but home prices remain just 0.7% shy of June's all-time high median of $442,389. Additionally, new constructions dropped 6.8% month over month in July, hitting its lowest level since 2020.

Speaker 1: 3:03

So should you wait for lower rates? That's up to you to decide. Some experts say it might not be a bad idea to buy now, while mortgage rates have fallen. They haven't dropped enough to significantly increase competition among buyers. This means you could potentially get a good deal. However, if you were concerned about the economy or think rates will drop significantly more, it might be worth waiting.

Speaker 1: 3:28

So, guys, I reported in my business brief this week that the new jobs created by the BLS, that the reporting of the new created jobs from March of 24, going 12 months back were actually off from 600 to a million. They were actually off by 881,000, as the number came out this morning. So where does this all go? The thing is that while rates are dropping that's a good thing Real estate is a slow moving behemoth, right. So the regular consumers or buyers have to get this information disseminated to them, and the media has to do their part on disseminating this to the regular consumers. Now will prices come down? I don't know, but what I do believe is that interest rates will definitely come down. My opinion is that they will come down here in the month of September. Next month, I believe we'll see two rate cuts Now. That will spike up buyer demand. So I'm kind of sitting here with the economists.

Speaker 1: 4:28

If you are going to, if you're thinking about buying a home, I would say buy it, go for it If the numbers make sense for you. We remember we have problem here with a shortage of housing. That problem, fundamentally, regardless of what happens in the economy, will not go away. The biggest thing that we all need to be looking at, guys consumers, investors, entrepreneurs, business owners, all of us, all of us should be concerned and should be paying close attention to the unemployment. As unemployment rises, that is the biggest threat to the whole fundamentals of the economy. If people don't have jobs, they don't spend money. They don't spend money, companies make less profits. Companies make less profits, they lay off more people and it becomes a vicious cycle. So the feds have to lower interest rates now before we start going down that vicious cycle. So those are my thoughts. So there you have it, a quick snapshot of this week's real estate market update. I'll see you guys next week. Peace out.