September 2024 Housing Market: Rate Cuts Bring Hope, but High Prices Keep Many Buyers on Hold

The housing market in September 2024 is a mixed bag of good news for buyers and ongoing challenges for those still on the sidelines. With recent interest rate cuts by the Fed, and a gradual easing of inflation, some are seeing a light at the end of the tunnel. However, high prices and economic uncertainty are still holding a lot of potential buyers back. At Nuvision, we’re here to give you a clear view of what’s happening, so you can make informed decisions whether you're in the market to buy, sell, or just curious about what’s next.

Steven Thomas: Autumn Brings a Slower Pace to the Housing Market

Real estate expert Steven Thomas, of Reports on Housing, says the housing market has been gradually slowing since March, with the pace picking up as we enter the Autumn Market. He notes that this time of year, beginning when kids return to school in late August and running through Thanksgiving, typically sees a natural dip in activity.

“The prime time season for real estate is now in the rearview mirror,” says Thomas. As autumn settles in, both housing demand and inventory start to decline. While spring and summer bring the most activity, fall is a more relaxed season, as families focus on school schedules, fall sports, and upcoming holidays.

Despite the slower pace, Thomas points out that while not as busy as earlier in the year, the autumn season offers valuable opportunities for buyers and sellers, just with a bit more breathing room and less pressure.

Zillow: Fed Cuts Rates, More Homes Available but Competition May Increase

The Federal Reserve’s decision to lower rates by 50 basis points is expected to provide some relief for buyers. Mortgage rates have dipped slightly, making home purchases more affordable. For example, a typical home bought today would save a buyer about $1,200 annually compared to one purchased just a few months ago. Inventory is up by 22% year-over-year, which means buyers have more options. But with these lower rates, competition might pick up again, especially in the fall when things usually slow down. Sellers are still seeing strong interest in well-priced homes, but affordability remains a challenge for many.

Redfin: Affordability Improves Slightly but Many Buyers Still on Sidelines

Homebuyers need to earn slightly less to afford a home now, thanks to the recent dip in mortgage rates. According to Redfin, the annual income needed to afford a median-priced home has dropped by 1% from last year, now sitting at $115,454. However, the typical U.S. household still earns about 27% less than that, leaving many buyers on the sidelines. Texas markets, like Austin and San Antonio, have seen the biggest drops in home prices, improving affordability. Meanwhile, areas on the East Coast, like Philadelphia, have seen increases in home prices, making it harder for buyers in those regions.

NAR : Existing Home Sales Down, Inventory Up as Affordability Remains a Challenge

According to National Association of Realtors (NAR), Existing-home sales dropped by 2.5% in August to a seasonally adjusted annual rate of 3.86 million. While sales are down from last year, inventory levels are up by 22.7% compared to August 2023, providing more opportunities for buyers. The median existing-home price rose by 3.1% year-over-year to $416,700. This marks the 14th consecutive month of price increases. Despite the added inventory, affordability challenges remain, and homes are still selling quickly, averaging just 26 days on the market. First-time buyers, who typically make up 32% of the market, dropped to 26% of sales, reflecting ongoing affordability issues.

What’s Next: Fed Rate Cut Could Bring More Buyers into the Market

The Fed’s rate cut may lead to lower borrowing costs, but it’s not guaranteed. Some experts believe mortgage rates could remain steady for now, as much of the anticipated Fed moves have already been priced into the market. That said, there’s a possibility of more buyers jumping into the market before year’s end. As always, it’s a bit of a waiting game with potential buyers watching interest rates closely, some waiting for further declines, and others holding back due to high prices or the uncertainty around upcoming elections.

At Nuvision, we provide these monthly reports to give our members an edge. Navigating the housing market is tricky, but staying informed can make a difference. Whether you're thinking about buying or just trying to keep up with the trends, we’re here to offer support, guidance, and the tools you need to make the best decision for you and your family. We’re here for you and the life you’re building.