Mortgage Market Update: October 2024

The mortgage landscape in October 2024 presents both opportunities and challenges for potential homebuyers. Here's a snapshot of the key trends impacting the market this month.

Mortgage Rates on the Decline

Mortgage rates have eased recently, with average 30-year fixed-rate mortgages hovering between 5.95% and 6.25%, down from earlier highs in 2023. This shift reflects stabilizing inflation and potential future rate cuts from the Federal Reserve. Lower rates improve affordability, providing buyers with increased purchasing power, though the benefits depend on how quickly buyers act before rates adjust again.

Evolving Housing Market Conditions

The cooling of the housing market is evident with a 0.7% year-over-year drop in median listing prices and a 31.9% increase in active listings. Homes are now taking longer to sell, spending an average of seven more days on the market compared to last year. This increased inventory gives buyers more options, but the pace of sales has slowed as many remain cautious, waiting for more favorable conditions.

Challenges and Buyer Sentiment

Despite falling mortgage rates, affordability remains a concern due to historically low housing inventory and persistent high home prices. Demand for new homes has not surged yet, as some buyers are still waiting for deeper rate cuts or more attractive listings. However, those looking to purchase now could benefit from reduced competition in the market before any further rate changes spark increased demand.

What to Expect Going Forward

Experts predict that mortgage rates could continue to decline in late 2024 and 2025, making homeownership more attainable. However, this may also trigger higher demand, keeping home prices elevated despite economic improvements. Prospective buyers should stay informed and assess their financial readiness, as conditions may shift quickly with further Federal Reserve decisions or changes in housing supply.

This period presents a good opportunity for those ready to enter the market, especially with interest rates reaching their lowest point in two years. As always, working with an experienced mortgage advisor can help buyers navigate the complexities of these shifting market dynamics.