It’s spring home selling season, and there’s good news for buyers who may feel less pressure to commit to a home on the spot as more listing options are available.
The Realtor.com® weekly housing data showed that listing prices flattened even as new listings and active inventory growth continued. The data suggests that March home shoppers will have more options and a bit more time to evaluate those options this year versus last.
The Realtor.com forecast expects modestly higher home sales from the low 2024 bar as inventory recovery gives home shoppers more options and more market power. That mortgage rates are steady this year at a time when they surged last year will likely benefit spring shoppers and should encourage sellers aiming for the Best Time To Sell less than a month away.
The Fed’s Open Market Committee this week made no change to its policy rate, but it will unwind some parts of its balance sheet more slowly. In addition, the Fed released a summary of its members’ economic projections. While the expected policy path is unchanged, members anticipate somewhat higher inflation and weaker economic and employment conditions than they did in December.
Mortgage rates, which were largely gathered before this news, edged up 2 basis points, but have remained in the 6.6% to 6.7% range for the past three weeks. They are also down from a year ago and from their January high of just over 7%.
While mortgage rates are not low, they are lower than they have been, a factor that likely helped push existing-home sales up in February. Despite rising month to month, February’s sales pace lagged behind last year’s fairly high bar, snapping a four-month streak of yearly gains.
Construction data shows that multifamily starts and permits were lower in February nationwide as builders have pulled back in the face of lower rents and policy uncertainty.
Households who aren’t yet ready to buy will find some relief in the rental market. Rents fell for a 19th straight month, though the decline was less than 1%. A steady supply of new rentals helped drive the slowdown in rents, but that trend is shifting.
When we dug into the data locally, though, we found construction pullbacks even in some markets where rents are rising. For example, in New York City, multifamily permits were down nearly 10% from their previous five-year average even as rents climbed 6.8% from a year ago, according to the latest Realtor.com data. This could mean extra rent pressure ahead in New York City and the eight other markets in a similar position. Those markets are: Kansas City, MO, Detroit, San Jose, CA, Baltimore, St. Louis, Charlotte, NC, and Washington, DC.