• US Housing Market Slowdown: Modest Price Rises and Affordability Challenges

  • Nov 19 2024
  • Length: 3 mins
  • Podcast

US Housing Market Slowdown: Modest Price Rises and Affordability Challenges

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  • Summary

  • The current state of the US housing industry is characterized by a slowdown in demand and a modest increase in home prices. According to the S&P CoreLogic Case-Shiller Index, home prices rose by 4.2% year-over-year in August 2024, marking the 15th consecutive all-time high[4]. However, this growth is significantly lower than the 19.28% increase seen in the previous year[1].

    The decline in mortgage rates in recent weeks has given a slight boost to home sales, with total home sales rising 2.6% over the month to 4.7 million in July[3]. However, pending home sales declined 5.5% month-over-month in July, indicating that affordability challenges continue to impact the market[3].

    The housing inventory remains low, with a 4.3-month supply of existing homes for sale as of September 2024, up 23% from the previous year but still short of the 5 to 6 months needed for a balanced market[4]. The median sale price for an existing home in the US was $404,500 in September 2024, the highest September median ever recorded[4].

    Homebuilder sentiment remains weak, with the National Association of Home Builders' Housing Market Index falling to 39 in August, below the threshold of 50 indicating poor building conditions[3]. Housing starts for July were at a seasonally adjusted annual rate of 1.24 million, 6.8% below June's 1.33 million units[3].

    Industry leaders are responding to current challenges by emphasizing the need for lower mortgage rates to spur home sales activity. According to Selma Hepp, Chief Economist at CoreLogic, "Lower mortgage rates would help spur home sales activity... declines in mortgage rates would drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions"[4].

    Compared to the previous reporting period, the US housing industry is experiencing a slowdown in demand and a modest increase in home prices. The decline in mortgage rates has given a slight boost to home sales, but affordability challenges continue to impact the market. Industry leaders are calling for lower mortgage rates to spur home sales activity and increase inventory.

    Key statistics include:

    - Home prices rose by 4.2% year-over-year in August 2024[4].
    - Total home sales rose 2.6% over the month to 4.7 million in July[3].
    - Pending home sales declined 5.5% month-over-month in July[3].
    - The median sale price for an existing home in the US was $404,500 in September 2024[4].
    - The housing inventory remains low, with a 4.3-month supply of existing homes for sale as of September 2024[4].
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