I hope this finds you well. As the fall season settles in, I wanted to send over an update on the residential housing market in case you or anyone you know is considering buying or selling in the coming months — or you just love keeping an eye on the market (like me!).

Since market conditions can shift rapidly, note that this update simply offers a snapshot of what’s happening nationally. If you’d like more specific data or have any questions, feel free to reach out.

U.S. Market Overview

  • Average U.S. home prices: Home prices dropped slightly in Q2 2024 to an average of $501,700, down from $519,700 at the end of Q1.
  • 30-year interest rates: As of September 16th, 30-year mortgage rates averaged 6.12%, down from 7.29% on the same day last year.
  • Median days on market: The median days on the market was 37 days, up six days year over year. Days on market is a good indicator of buyer demand.
  • Homes sold above list price: In August 2024, 30.1% of homes in the U.S. sold above list price, down 6.1 percentage points year over year.
  • Average starter home mortgage payment: Monthly housing payments for starter homes sold in July were $1,981, up 4.4% from a year ago. By definition, a starter home is a smaller, more affordable house, typically falling between the 5th and 35th percentiles in sale prices.

Tips for Buyers

  • Get pre-approved before making an offer. A pre-approval letter from a lender shows sellers you’re serious about buying, but it’s only valid for 60 to 90 days, so you’ll want to work backward and plan accordingly.
  • Remember, rates are important, but they’re not ultimate. As rates are predicted to come down this fall, you may be tempted to wait for the best deal. However, when interest rates drop, home prices tend to surge, negating any gains. In fact, experts anticipate price increases of 6.1% (Fannie Mae), 4.1% (Mortgage Bankers Association), and 3.8% (NAR) by 2024 as we close out the year.
  • Consider a smaller home. If you’re struggling with affordability, look into smaller homes or a home that could serve as a “stepping stone” toward your home goals. Since 1975, the average five-year return on U.S. home prices has been +26%. That means a $200,000 home could be worth $252,000 in five years — a jump that would make a nice down payment on your next home.

Tips for Sellers

  • Focus on decluttering, curb appeal, and repairing “must-fix” issues. In contrast to several years ago, when rates and prices were lower, buyers are less eager to tackle complex DIY projects. A great first impression matters during the early days of your home hitting the market.
  • Price competitively. According to one survey, overpriced homes ranked as the number one deal-breaker for buyers. Working with a local agent is critical to determining a fair market value — especially as the market is rapidly changing this fall.
  • Be flexible. Consider offers that might not be at your asking price, especially if they come with terms like favorable financing (cash offer or significant down payment), sizable earnest money (a sign the buyer really likes your home), or an ideal closing timeline (if you don’t have to rent a home or storage unit, it can save you money).

I hope you found this information helpful. Please let me know if you need anything real estate-related this fall — that’s why I’m here.