What will the Future Bring? (5/15/2024)

What will the Future Bring?  


  • Pent-up demand, settlement agreement will be factors.

        Home sales in 2023 were the worst in nearly 30 years. The micro-level reasons—owners locked into low mortgage rates, low inventory, and rising interest rates—explain the fall in sales. 

        –  But looking at the big picture, it makes less sense. Last year’s 4 million existing-home sales were the same as in 1995, when there were 70 million fewer people living in the U.S. 

        –  The massive stored-up housing demand could easily mean increased home sales in eight of the next 10 years.                         

       –  In February, existing-home sales rose 9.5% from the prior month even after accounting for seasonal factors and a leap year. The increase was helped by a 10% inventory boost.  (One regional exception was in the Northeast, where sales fell by 10%. But this region also had the largest home price gain because of lack of supply and a wider prevalence of multiple offers.) 

        –   One issue to monitor is consumer response to the rules of the new settlement agreement.  Sellers and buyers clearly benefit from a cooperative arrangement between the listing broker and buyer broker, and the settlement was able to maintain consumer choice with respect to offering compensation off-MLS.                       

       –   In the near term, the dynamics are hard to predict. But I believe sellers will continue to see the value of cooperation when listing agents clearly explain the benefits, such as increasing housing opportunity and widening the potential buyer pool. 


  • First-Timer Share Drops Again

       –   Existing-home sales increased in February. Yet first-time buyers’ share of the market declined to 26%, down from 28% in January. According to NAR’s 2023 Profile of Home Buyers and Sellers, first-time buyers made up 32% of the market from July 2022 to June 2023, while the historical norm is 38%.


Supply & Demand

Realtor Magazine(Spring) 

All trend lines are national from February 2023 to February 2024.


All-Cash Sales in February

All-cash sales made up 33% of transactions in February, up from 32% in January and 28% a year ago. This is the second month of elevated all-cash sales and the highest share since March 2014.

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