Housing Market Sees Uptick as Buyers Adapt to New Reality
The housing market is showing signs of life, with contract activity surging 2.2% in November, according to the National Association of Realtors (NAR). This marks the fourth consecutive month of growth, with the Pending Home Sales Index reaching its highest level since February 2023.
Buyers Shake Off Mortgage Rate Blues
Despite elevated mortgage rates, buyers are taking advantage of increased inventory levels and recalibrating their expectations. “Consumers are no longer waiting for or expecting mortgage rates to fall substantially,” said Lawrence Yun, NAR’s chief economist. Instead, they’re seizing opportunities to negotiate in a shifting market.
Regional Gains
While the Northeast region saw a decline, all other parts of the country experienced an increase in contract activity. The South led the pack, with a 5.2% month-over-month jump and an 8.5% year-over-year gain. The West saw the largest annual increase, with an 11.8% surge.
A Shift in Market Dynamics
After two years of mortgage rates above 6%, buyers are adjusting their strategies. With high prices and elevated mortgage rates keeping many potential buyers and sellers on the sidelines, the market is slowly shifting away from a seller’s market. This means buyers are now in a better position to negotiate.
2024 Outlook
Despite the recent uptick, 2024 is still expected to be one of the slowest years for existing home sales in decades. The NAR predicts 4.5 million existing home sales next year, with current sales at a seasonally adjusted annual rate of 4.15 million. However, as buyers adapt to the new reality, the housing market may continue to show signs of improvement.
What’s Next?
As the market continues to evolve, it’s essential to stay informed about the latest trends and developments. With pending home sales serving as a leading indicator of housing market activity, buyers and sellers alike will be watching closely to see what the future holds.
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