Mortgage Rates Dip, Applications Rise
An increase in home purchase applications was recorded during the first week of March, driven by mortgage rates dipping below 7% for the first time in more than a month. This suggests that more potential home buyers, tired of waiting for rates to drop further, are beginning to consider mortgage rates under 7% to be acceptable.
The Mortgage Bankers Association's (MBA) data for mortgage applications saw a rise of 7.1% for the week ended March 8, compared with a 9.7% increase during the previous week.
Several contributing factors helped push mortgage rates below 7%. According to the MBA's chief economist, "Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months."1
New Listings Rise to the Highest Level in Over a Year
According to data for February 2024, numbers of new listings rose by 3.8% month-over-month, which added up to the biggest increase in six months. On a year-over-year basis, new listings increased by almost 15%, which is the largest annual gain since May 2021.
New listings rose fastest from a year earlier in Texas, while active listings rose fastest in Florida. In Florida, condo listings in particular are contributing to the jump in supply amid a surge in HOA and insurance fees.
Additional inventory hasn't halted the rise in home prices, however, as demand is still higher than supply. The median U.S. home sale price climbed 6.6% year over year—the biggest uptick since September 2022—to $412,778.
On an annual basis, new listings rose most in Austin, TX (44.6%), Dallas (38.1%), and Charleston, SC (36.8%). Florida won the active listings race, seeing the fastest growth in Cape Coral (60.6%), North Port (52.5%) and Fort Lauderdale (25.5%).
The typical home that went under contract in Seattle, WA did so in 11 days, making the Emerald City the fastest market among those analyzed. Next came Rochester, NY (12) and San Jose, CA (12).2
Why More Prospects Get the Picture with Video
If you've hesitated to create marketing videos for your social media, it may be the ideal time for you to learn this skill. Real estate mogul Barbara Corcoran was one of the first to make videos of her listings, using the now-extinct VHS format.
While video showings of homes became popular during the pandemic, they haven't lost their appeal to potential buyers. Most are no longer as eager to book a private viewing and would rather check out your listings online without leaving their home or office.
Survey data found that over 90% of salespeople claim that video content has played a major role in helping increase prospects' understanding of a product or service. In addition, over 80% of survey respondents claimed that creating videos to support sales provided a good return on investment (ROI).
If you're unsure how a top-performing listing video should look, check out this article featuring some of the best videos of 2023.3
Why It's Time to Stop Using the S Word
What do you think of when you hear the phrase "starter home"? Dictionaries define it as a small house cheap enough for first-time buyers to afford. However, consumer attitudes about housing have changed, including the minimum size required for long-term comfort.
The phrase starter home also has some potentially negative connotations. One suggests that the property has a limited shelf life for its new owners, while another suggests that people who never "move up" from their starter home do so because of lack of money. However, attitudes have changed. For example, more homeowners have realized that less square footage saves money all year round, from utility bills to insurance premiums.
Some agents admit they're having problems giving up the phrase starter home, as a second purchase for these buyers is generally larger and more expensive. But people will always have reasons to move that aren't related to their home's size, and every year brings more first-time buyers into the real estate arena. So put a sticky note on your phone that reminds you that homes are homes, and even smaller ones are someone's dream home.4
Homebuilder Sentiment Warms for Spring
The Index is comprised of these three topics:
Current sales conditions rose 4 points to 56.
Expectations of improving sales for the next six months rose 2 points to 62.
Buyer traffic increased 2 points to 34.
Regionally, on a three-month moving average, sentiment rose most in the Midwest and West.
The report also noted that, although mortgage rate buydowns are still a popular incentive, fewer builders are lowering home prices to attract buyers. Recently, 24% of builders reported cutting home prices. This is a considerably lower percentage when compared to December 2023's 36%.5
Sources: 1finance.yahoo.com, 2redfin.com, 3blog.hubspot.com, 4theamericangenius.com, 5cnbc.com
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