The July 2024 housing market has shown some intriguing developments, with existing-home sales rebounding after months of declines. Buyers and sellers navigate new opportunities as the market adjusts to economic shifts and inventory challenges.
Existing-Home Sales Rebound in July 2024
In a positive turn of events, existing-home sales rose by 1.3% in July 2024, breaking a streak of four consecutive months of declines. While this uptick is modest, it signals a stabilization in the market after a slow start to the year. According to the National Association of REALTORS® (NAR), completed transactions across single-family homes, townhomes, and condos reached an annual rate of 3.95 million in July. However, despite this improvement, sales were still down by 2.5% compared to July 2023. This indicates that while the market is improving, challenges such as affordability and mortgage rates continue to impact overall sales figures.
The median home price for all housing types increased 4.2% from July 2023, reaching $422,600. This marks the 13th consecutive month of year-over-year price gains, suggesting that demand continues to outpace supply, especially in high-demand regions.
Regional Breakdown Highlights Disparities in Market Dynamics
The July 2024 housing market experienced diverse trends across different regions of the U.S. According to the NAR, three out of the four major regions saw increases in home sales. The Northeast led the charge with a 4.3% increase in sales from June, reflecting higher buyer interest in that area. Additionally, prices in the Northeast rose by 8.3% year-over-year, with the median price reaching $505,100.
While the South still experienced a 1.1% rise in sales, it saw a 3.8% decline compared to July 2023. Meanwhile, the Midwest’s sales numbers remained flat month-over-month, and the West saw a 1.4% increase in sales and a 1.4% increase in pricing year-over-year. The regional disparities highlight how local economic conditions, population growth, and inventory constraints contribute to varying market dynamics across the country. Understanding regional trends is essential for buyers and investors to make informed real estate decisions.
New Construction Surges Amid Limited Inventory
One of the biggest stories of the July 2024 housing market is the surge in new construction. With inventory of existing homes remaining tight, homebuilders are stepping up to fill the void. The National Association of Home Builders (NAHB) reported significant increases in single-family home permits across the country, with a 17.6% rise in large metro areas. This uptick in new construction offers a ray of hope for buyers struggling to find affordable existing homes. Builders are also increasingly shifting toward speculative building, which means they are constructing homes without having a buyer lined up. This business model enables buyers to move into new homes more quickly and reduces delays typically associated with custom builds.
New home sales saw a 10.6% jump in July 2024 compared to June, marking a significant recovery from the sluggish market earlier in the year. For buyers, the combination of new construction and existing-home inventory provides more options than were available in previous months.
Impact of Mortgage Rates on Buyer Behavior
While inventory and new construction have offered some relief, mortgage rates remain significant in the July 2024 housing market. The 30-year fixed mortgage rate averaged 6.49% in August, reflecting a slight increase from the previous month. While this rate is lower than the peak rates of early 2023, it still represents a hurdle for many first-time homebuyers.
Despite the high mortgage rates, all-cash sales accounted for 27% of transactions in July, indicating that investors and wealthier buyers are still active in the market. Interestingly, the share of first-time buyers held steady at 29%, showing that while affordability is a concern, many buyers are still finding ways to enter the market. Mortgage rates also impact which types of homes buyers are choosing. While generally more affordable, condos have seen slower sales than single-family homes. This trend is likely driven by rising maintenance and insurance costs, making condos less attractive despite their lower price points.
Market Outlook: What to Expect for the Rest of 2024
Looking ahead, the July 2024 housing market trends suggest we may see continued moderate growth in sales and prices. As new construction activity ramps up, more inventory should become available, which could alleviate some of the upward pressure on prices.
Additionally, if mortgage rates remain stable or decrease slightly, we may see a boost in first-time buyer activity as affordability improves. However, any significant changes in the economic landscape, such as shifts in interest rates or inflation, could still impact housing demand in the coming months. For sellers, the market remains favorable, particularly in high-demand areas with low inventory and rising prices. On the other hand, buyers should explore existing homes and new construction options to find the best deals.
Looking Beyond the July 2024 Housing Market
The July 2024 housing market presents a mix of challenges and opportunities. With existing-home sales stabilizing, new construction surging, and regional variations affecting pricing, the real estate landscape remains dynamic. For both buyers and sellers, staying informed about market trends will be key to making successful real estate decisions in the months ahead.
To learn more about the Illinois real estate market, contact the title insurance and escrow specialists at Plymouth Title Guaranty Corporation.