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Full Report

June 2024 Real Estate Market Update   Written By: Ivan Marquez Executive Assistant, Hum Real Estate

FULL REPORT

This month, we take a closer look at two major factors shaping the housing landscape in 2025: home prices and mortgage rates.

HOME PRICES

There’s a lot of confusion around current home prices, with headlines reporting both increases and declines across different markets. Nationally, and overall, home prices are rising but not as rapidly as before. A recent Clever Real Estate survey shows that 70% of Americans are worried about a potential housing crash in 2025, highlighting widespread concern driven by mixed media messages.

According to data from Realtor.com, the supply of homes for sale has improved, with inventory up 30% compared to last year. However, it's still 16% below pre-pandemic levels. While rising inventory is helping to ease home price growth and giving buyers more options, the overall supply remains too low to trigger a market crash.

Home prices grew 3.9% year-over-year according to the latest FHFA data. This is down from 7% growth the year prior, so while growth is slowing, it’s still positive overall. However, with home prices up over 57% in the past five years and inventory still tight, experts expect continued moderation, not a crash, with appreciation likely slowing to around 2% over the next year. This is still positive growth around the more normal, historical levels of home price appreciation. 

Locally and nationally, the housing market saw a noticeable shift over the past year. In the second half of 2024, new listings dropped sharply, reflecting the uncertainty caused by volatile mortgage rates and broader economic concerns. But as we moved into 2025, both Tallahassee and the national market began to show signs of renewed activity. The steady rise in new listings suggests that sellers are gaining confidence, likely encouraged by the growing expectation that the Federal Reserve may begin cutting rates later this year.

MORTGAGE RATES

Mortgage rates were relatively stable in March, hovering around 6.75%, but became highly volatile in April due to growing economic uncertainty. Concerns about inflation, tariffs, and the overall economic outlook triggered sharp rate swings, jumping from the lowest to the highest levels of the year within a week. As of early May, all eyes are on the Federal Reserve’s upcoming meeting, which may offer more clarity on where rates are headed next.

Inflation eased slightly in April, which is a positive sign for the economy. However, it still remains above the Federal Reserve’s 2 percent target. While this recent improvement is encouraging, one month of data does not indicate a lasting trend. The Fed is closely monitoring several factors, including the potential impact of tariffs, as it evaluates the direction of future economic policy.

Unemployment remained steady at around 4.2 percent according to the latest data. The Federal Reserve is watching for signs of a slowing economy, which would typically include a rise in unemployment, but that has not occurred yet. They are continuing to monitor the situation closely before making any decisions.

Forecasts from the CME Group suggest that the Federal Reserve may cut the federal funds rate three to four times this year, but only if the right economic signals appear. A rate cut is not expected in May, with a very high probability that rates will hold steady. However, more cuts are anticipated later in the year if signs of a slowing economy become clearer.

BOTTOM LINE

Home prices are still rising, inventory is improving, and while mortgage rates remain volatile, expected rate cuts later this year could boost market confidence and activity.