Thank you for joining me for the May 2024, Mortgage Market Recap!

The housing market did a little yo-yo action in May as mortgage rates decided to stop playing nice again. But before we dive into the drama, grab a snack and get comfy – this is one housing update you won’t want to miss!

Sales Slip as Rates Take a Hike

Mortgage rates laced up their hiking boots and took off for the 7% summit again in April. Home sales obviously weren’t fans of the climb, taking a 2.7% tumble in March as buyers got cold feet. The existing home squad led the declines with a 4.3% month-over-month drop. Thanks a lot, higher rates!

But don’t fret my frugal friends, the new construction crew is keeping things interesting. They snagged 14% of total sales in March as some buyers went hunting for fresh inventory.

Builders Shift Down a Gear

Speaking of new construction, new housing starts hit a speed bump in March with a 14.7% decline – the biggest monthly slowdown since way back in May 2022. Single-family home starts tapped the brakes at a 12% drop.

But don’t sound the alarm just yet! Builder confidence managed to squeak by in positive territory in March. Those hardy homebuilders are keepin’ on even as rates go ramblin’ again.

Home Prices? Still Climbing!

Alright home buyers, you may want to brace yourselves for this one. The FHFA housing price index showed home values continued their ascent in February with a 1.2% monthly increase. That puts the annual home price growth rate at a lofty 7%.

Between you and me, I’m starting to think these sellers are secretly hoping we all become millionaires soon. A home buyer can dream, right?

Refi Party’s Winding Down

As if rising rates weren’t enough of a buzzkill, refinance activity in April fell 3.3% compared to March. Can you blame existing homeowners for staying put after locking in those beautiful low rates over the past few years? I sure can’t!

Cut to the Chase: Generational Divide

Here’s the scoop – a new analysis broke down mortgage rates across generations. The millennials and Gen X-ers are sitting pretty with average rates around 4%. Nice!

But wait, there’s more! About 4-5% of these same generations are rocking rates above 7%. If rates come back down to earth, that’s a whole lot of homeowners who may want to seriously consider a refi party.

The plot also thickens when it comes to the big M-word: Mobility. Some millennial families are more likely to take the plunge and move despite locking in low rates as they outgrow their starter homes. But Gen X? They’ll probably stay camped out enjoying those sweet sweet sub-4% mortgage rates.

What’s Next? Your Guess Is As Good As Mine!

While economic growth is expected to throttle back in the next couple years, a full-blown recession doesn’t seem to be on the horizon for now. As for the housing market? The analysts are calling for slightly better sales in 2024 compared to last year’s dizzying action.

But don’t get too excited – higher mortgage rates and that relentless lack of inventory will keep raining on the parade. But hey! It’s not all bad news! With rates at a plateau, and home inventory too, this usually means there’s a bit more wiggle room in negotiations. We’re still seeing lots of seller credit offerings and some purchase price negotiations. So if you’ve been eye-ballin’ a home that’s been sittin’ around for a little while, talk to your trusted real estate agent about making an offer – throw something out there! You never know what might stick 😉

** May 2024 Mortgage Recap interpretation based on Freddie Mac‘s, “U.S. Economic, Housing and Mortgage Market Outlook – May 2024”**