Gain valuable insights into the early 2024 housing market trends.
As January progresses, we’re venturing into the early stages of the spring market, a crucial time for the housing sector. Let’s dive into the latest trends and forecasts.
A common concern among buyers lately has been the fluctuation of interest rates. Although rates have seen a slight decrease from over 7% to just above 6.5%, buyers remain cautious. This hesitation is understandable given the recent rate trends, but it’s important to recognize that these rates have already made a significant drop.
Despite a minor increase in inventory — merely a percentage point or two — the market is still experiencing remarkably low levels. In our most recent local Minnesota report, we’ve observed that this pattern of low inventory has been consistent over the past year and a half. The number of available properties for buyers remains limited, but we’re optimistic about a potential shift. The market might soon witness an increase in listings, leading to a more active buyer pool.
“Navigating the housing market requires understanding these nuances and trends.”
Presently, we’re positioned in a seller’s market, evidenced by an absorption rate of approximately 1.8 months. This rate indicates that if no new homes were listed, our current inventory would be sold out in less than two months. A market is typically considered a seller’s domain when the absorption rate is below five months. However, there’s a nuance to this market: buyers now have more negotiating power than before, with the ability to request inspections and engage in more traditional buying practices.
Real estate is inherently local, and we observe significant variations in absorption rates across different neighborhoods. These rates have consistently ranged between one and two in the past year, suggesting a stable pattern. Another vital aspect to consider is the rate of home price appreciation. After witnessing a soaring 10% increase a couple of years ago, which was unsustainable in the long term, we’re now seeing a more moderate and healthy rate of around 3%.
Navigating the housing market requires understanding these nuances and trends. If you have questions or need further insights into the current market situation, feel free to reach out for personalized advice and support.
For more detailed analysis and expert insights, don’t hesitate to contact us. We’re here to guide you through the ever-evolving landscape of the housing market.
