The Feed – Your Monthly Guide to Housing Market Matters – December 2024

Housing Market Optimism Hits Two-Year High

The latest from Fannie Mae’s Home Purchase Sentiment Index reveals growing optimism among Americans about the housing market. October’s results mark the most positive sentiment since February 2022. However, challenges persist. Only 20% of respondents believe it’s a good time to buy, citing high home prices as the main deterrent. On the flip side, 64% feel it’s an excellent time to sell, creating favorable conditions for current homeowners considering listing their properties.

How Much Do You Need for Repairs, Fixtures, and Furniture?

Buying a home comes with upfront costs like down payments and closing fees, but it’s crucial to account for post-purchase expenses. On average, new homeowners spend $13,500 on repairs and renovations and an additional $6,500 on furniture and fixtures. While making these adjustments is optional, it’s wise to budget for them to turn your new house into your dream home.

Home Prices Still Growing But at a Slower Pace

According to the S&P Case-Shiller U.S. National Home Price Index, home prices grew 3.9% year-over-year through September. While this marks a slowdown from the previous 4.3% increase, regional disparities remain. The Northeast and Midwest lead growth at 5.7% and 5.4%, respectively, while the South lags with a 2.8% increase. Denver recorded the smallest uptick at just 0.2%.

Older Homeowners Holding Homes for Longer

A study by the Mortgage Bankers Association highlights a rise in homeownership rates among Americans aged 70 and older since 2015. With higher mortgage rates and a growing elderly population, many homes remain off the market, limiting inventory and contributing to higher prices for prospective buyers.

Active Inventory at Highest Level Since 2019

For buyers frustrated by high prices, relief may be on the horizon. October’s inventory levels were 29.2% higher than the same time last year, marking the most significant availability since December 2019. As supply increases, buyers can expect better affordability and steadier prices moving forward.

Market Conditions Push Age of Typical Buyer Higher

The 2024 Profile of Home Buyers and Sellers from the National Association of Realtors shows a significant shift in buyer demographics. The median age of buyers has reached a record high of 56, while first-time buyers are increasingly sidelined by high prices and interest rates. Meanwhile, cash-ready current homeowners dominate the market.

Home Buyers Regain Negotiating Power

In welcome news for buyers, negotiation power is on the rise. Recent data shows 52% of buyers successfully negotiated with sellers, with 94% achieving favorable terms. Additionally, 34% paid below the asking price, a notable improvement compared to prior years.

Whether you’re buying or selling, understanding the nuances of today’s market is key to making confident decisions. Stay informed and plan strategically to maximize your opportunities this season.