National Real Estate Watch: Aug ’24 Home Seller Insights

Are you stuck wondering if now’s the right time to sell your home? You’re not alone. At CENTURY 21 Simpson & Associates, we’ve got the data you need to make the best decision.

In this update, we’re diving into the latest national real estate trends—covering everything from current inventory and existing home sales to the median sales price, mortgage rates, and the speed of sales. Plus, we’ll break it all down with practical advice for both sellers and buyers.

Welcome to the August 2024 edition of the National Real Estate Market Watch.

The big question: Is now the time to sell? The answer is yes, and here’s why, according to the top 5 market indicators.

 

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(Playlist: National Residential Real Estate Market Watch)

 

Let’s dive into the first key indicator: Months Supply of Inventory.

Why does this matter? It’s your gauge for understanding whether the market is tipping in favor of buyers or sellers. Think of it as the balance between supply and demand in real estate.

Simply put, Months Supply of Inventory measures how long it would take to sell all the homes currently on the market at the current sales pace. If you’re planning to buy or sell, this is a crucial stat to watch.

Inventory is coming off record lows. Total housing inventory at the end of June was 1.32 million units, up 3.1% from May and 23.4% from one year ago when it was 1.07 million.

Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.7 months in May and 3.1 months in June 2023.

The last time unsold inventory posted a four-month supply was May 2020 when it was 4.5 months.

Six months of inventory represents a balanced market, favoring neither buyer nor seller. When Months Supply of Inventory is below 6 months, it is considered a sellers’ market.

At 4.1 Months Supply of Inventory, the market continues to favor sellers, giving them more negotiating power than buyers. With supply increasing, buyers benefit from a little more choice and time in the process.

 

Next up is our second key indicator: Existing Home Sales.

Why is this important? It shows us how fast the market is moving. The quicker homes are selling, the more it tips the scales in favor of sellers.

Existing Home Sales tracks the number of properties that have officially closed during the month. If you’re keeping an eye on market momentum, this is the number to watch.

Existing-home sales fell 5.4% in June to a seasonally adjusted annual rate of 3.89 million. Year-over-year, sales also dropped 5.4%-down from 4.11 million in June 2023.

According to NATIONAL ASSOCIATION OF REALTORSÒ Chief Economist Lawrence Yun, “We’re seeing a slow shift from a seller’s market to a buyer’s market. Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

First-time buyers were responsible for 29% of sales in June, down from 31% in May but up from 27% in June 2023.

Even as home sales trend downward, sellers ready to list their homes should be encouraged because buyer demand still exceeds supply. As buyers accept the “new normal” for mortgage rates, they will re-enter the market creating more competition.

 

Now, let’s turn our attention to the most-requested indicator: Median Sales Price.

Why does this top the list? It reveals the core pricing trends that define the market’s health.

The Median Sales Price is the midpoint—where half the homes sold for less, and half sold for more. If you’re curious about how prices are shifting, this is the number to watch.

The median existing-home sales price bounced 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the twelfth consecutive month of year-over-year price gains.

These are closed sales, so they are based on contracts signed mostly in April and May, when the average rate on the 30-year fixed mortgage jumped above 7%. Rates have pulled back slightly since then, to the high 6% range.

According to NATIONAL ASSOCIATION OF REALTORSÒ Chief Economist Lawrence Yun, “Even as the median home price reached a new record high, further large accelerations are unlikely. Supply and demand dynamics are nearing a balanced market condition. The months supply of inventory reached its highest level in more than four years.”

Sellers still have an opportunity to capitalize on historically high prices and continued buyer demand. Buyers should consider locking in today’s prices—they may rise as more buyers re-enter the market.

 

Let’s move on to a critical factor in the market: Current Mortgage Rates.

Why should sellers care? These rates shape how many buyers can afford your home and how quickly it might sell.

While mortgage rates can differ depending on the area, lender, and type of financing, we’ll focus on the national average for a 30-year fixed-rate mortgage to give you a clear picture.

The 30-year fixed mortgage rate from Freddie Mac fell further to 6.73% over the last week from 6.78%. At 6.73%, with 20% down, a monthly mortgage payment on a home of $400,000 is $2,071; with 10% down, it is $2,330.

According to Freddie Mac, expectations of a Fed rate cut coupled with signs of cooling inflation bode well for the market, but apprehension in consumer confidence may prevent an immediate uptick as affordability challenges remain top of mind. Despite this, a recent moderation in home price growth and increases in housing inventory are a welcoming sign for potential homebuyers.

At 6.73%, this is the lowest mortgage rate reported since February and helps home buyers with one part of the housing affordability equation.

Lower rates are good news for first-time buyers but may not be enough to move potential sellers who love their low rates.

Sellers should be encouraged that even though interest rates are pricing some buyers out of the market, demand still exceeds supply. Buyer affordability is strained with both higher rates and higher home values in this supply-constrained market.

 

Finally, let’s examine our last key indicator: Days on Market.

Why is this critical? It helps us gauge whether our pricing strategy is on point or if there’s resistance in the market that could lower buyer interest and negotiating power.

Days on Market represents the average time it takes for a listed property to go under contract, starting from the day it’s listed. This number can tell you a lot about market dynamics.

Properties typically remained on the market for 22 days in June, down from 24 days in May but up from 18 days in June 2023.

Homes listed received an average of 2.9 offers, flat from 2.8 offers last month and down from 3.5 offers one year ago.

With supply still limited relative to demand, 29% of homes sold above list price, virtually flat from last month’s 30% but down from 33% a year ago.

Sellers should be encouraged that as competition increases, more buyers could start acting fast. Increased competition means buyers will need to act fast and be ready with a strong offer.

 

Let’s recap what sellers need to know and summarize some actionable insights for anyone considering selling their home.

• Tight inventory continues to be a major factor fueling this market. With 1.32 million properties and 4.1 months of listings on the market, the market continues to strongly favor sellers.
• With fewer homes being sold, your property stands out more in the market, increasing its visibility to potential buyers
• Prices in June were up 4.1% compared to last year.  Tight inventory and strong buyer demand could lead to more price increases this year.
• Rates are still below the historical average of 7.73%. Buyer demand indicates that buyers who can afford to buy are still in the market.
• Homes were on the market for 22 days in June. With supply still limited relative to demand, just under a third of homes sold above list price.

 

If you have a home to sell and were feeling like you missed your window, don’t miss this one.

At CENTURY 21 Simpson & Associates, we know that selling a home can feel overwhelming. That’s why we’re here to help. If you’re thinking about selling, let’s talk. We’ll analyze the latest market data to see how it aligns with your financial goals.

Remember, trying to perfectly time the market is nearly impossible, but the data is clear: If you’re ready to sell, now is the time to make your move.

 

Contact our Frankfort office or connect with one of our experienced agents to compare these national trends with what’s happening right here in Central Kentucky. We’re here to answer any questions you have about the current market.

 

Thanks for visiting and please come back again next month!