The May 2024 housing market data reveals significant fluctuations in home sales, prices, inventory levels, and new construction activities. As we navigate through 2024, the housing market continues to present a mixed bag of trends and challenges. For Illinois residents and those involved in the real estate sector, understanding these dynamics is crucial for making informed decisions.

In a remarkable turn of events, the U.S. housing market has skillfully sidestepped the looming threat of a catastrophic crash, sparking widespread interest and fueling fervent discussions among experts and enthusiasts alike. This dynamic and ever-shifting terrain has emerged as a central focal point of contemplation and analysis, captivating the attention of those vested in its trajectory.

As we navigate through the twists and turns that define the intricate landscape of real estate, a singular truth emerges amidst the complexities: the housing market is undeniably in a state of profound transition. This transition, akin to a captivating metamorphosis, is reshaping the very foundations upon which the market stands, redefining norms and beckoning forth a new era of possibilities.

As inflation soars and loan applications plummet, real estate analysts are starting to see evidence of a buyers’ market in 2022. For the past several years, many real estate analysts considered the housing market to be a ‘seller’s market’. In the real estate world, home prices rose, interest rates fell, and demand reached one of the highest points in decades. Now, though, that trend may be changing. As the United States housing market shows a slowdown in purchasing, the tide shifts towards buyers instead.

As previously mentioned, 2021 marked one of the best years for real estate in recent memory. After the coronavirus pandemic stifled home sales throughout the country, the real estate market rebounded at a quicker pace than anticipated. However, the real estate market still deals with longstanding housing inventory challenges. In addition, rising home prices and mortgage rates produce a barrier to entry for prospective first-time home buyers.

After a strong performance towards the end of 2021, existing home sales experienced an unanticipated decline in December. Thus, home sales fell 5% from November to December 2021. However, the United States real estate market realized a massive 8.5% improvement over 2020. In doing so, existing home sales achieved their best year since 2006.

In the United States housing sector, home buyers face strong barriers heading into 2022. While December 2021 saw major FHFA changes, housing starts and home sales remain competitive.

2021 represented a banner year for real estate, leaving many to inquire about 2022 mortgage rates. Last year, mortgage rates hovered around record low numbers. Real estate experts largely attributed this to the prevalence of the coronavirus pandemic, and its numerous variants.

The latest data shows that inflation continues its epic climb while home sales rapidly recover across the country. As a result, the outlook on economic growth and future Fed policy remains stagnant. The Fed stated that their core PCE target is 2.0%. In May 2021, core PCE rose 3.4% higher than a year ago. While this is slightly below the consensus forecast, core PCE jumped up from an annual rate of increase of 3.1% in April.

The economy gained 916,000 jobs in March 2021; revisions added 156,000 more. Strength was seen in the hospitality and construction sectors. The unemployment rate dropped from 6.2% to 6.0%. Average hourly earnings, an indicator of wage growth, fell slightly. They were 4.2% higher than a year ago, down from 5.2% last month. Last week's key employment data revealed that companies are hiring back workers who were let go due to the pandemic even quicker than anticipated. At the end of February, job openings jumped to 7.4 million, well above the consensus forecast. The Department of Labor releases the total number of new claims for unemployment insurance each week; the latest reading was 547,000, the lowest level in over a year.

Recent reports have continued to show reasons for positivity related to the economy in job growth and inflation, but many investors continue to worry about the long-term effects leading into the rest of the year.