Contract signings increased last month, and homebuyers increasingly face multiple offer scenarios. NAR released their housing forecast for both this year and 2024.
Pending home sales increased slightly in June and indicators are showing that the housing market is beginning to improve. Median existing-home prices hit their second-highest mark ever seen since 1995 in June; more buyers are entering multiple offer situations; reports from the National Association of REALTORS(r) show this as well. Furthermore, NAR’s Pending Home Sales Index rose 0.3% month over month – its first increase since April.
Lawrence Yun, NAR’s chief economist states: “Recovery may have not taken place yet but the housing recession is over.” Multiple offers indicate an insatiable demand due to an inadequate supply. Homebuilders have responded by increasing production and hiring more workers – an indication of recovery taking hold in this market.
Housing inventories continue to decline by 13.6% year-on-year and have fallen even lower since last year’s low levels. According to Yun, “There are simply not enough homes for sale,” according to recent data provided by NAR. Seventy-six percent of existing homes sold in June had only been on the market for less than one month according to this source.
Home buyers today face limited choices, higher home prices and rising mortgage rates – yet hope may soon arrive: mortgage rate hikes may soon cease, which would bode well for homebuying activity according to Yun.
“With inflation approaching Federal Reserve targets and mortgage rates appearing to have reached their zenith,” Yun says. Given ongoing job gains, any meaningful reduction could spark a rush of buyers later this year and into next.
NAR predicts that 30-year fixed-rate mortgage rates could reach 6.4% by the end of 2019, before reaching 6.0% in 2024. More recently, mortgage rates have approached 7% – far above their ultra-low 2% or 3% averages seen just over one year ago.
