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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’s report focuses on the latest trends shaping the real estate market, including anticipated improvements in mortgage rates, a rise in home sales, and stable price growth. We’ll explore how these factors are expected to impact buyers, sellers, and the overall housing landscape moving into 2025.

MORTGAGE RATES

Job Growth

Job growth was strong in government and healthcare, but other industries showed weaker growth or job losses. This slow job growth may lead the Federal Reserve to lower interest rates in order to help boost the economy. Overall, the job market is not as strong as in previous years.

Inflation

Inflation is under control, and the Federal Reserve is on track to maintain price stability. As the job market weakens and inflation stays low, this could lead to better mortgage rates next year, making homes more affordable. Many buyers have paused their search due to high prices, but with rates expected to improve, those buyers may return, creating a chance for early buyers to act before competition picks up.

HOME PRICES

The average price of houses for sale varies from city to city. We can connect you to a local real estate expert in your area to break down home prices.

Here's what happened in our area over the past several months:

• Tallahassee: Prices started a bit lower than the national average in February but jumped way up in March, reaching a peak. Then, in April, they dipped a bit but still stayed above the national average until the summer months. However, the last three months have seen steady home prices well above the national average. 

So, what does this mean?

Tallahassee has deviated from the national average trend this year when it comes to home prices, and seems to be seeing some volatility. However, overall, the past few months have proven it is still a strong market locally.

New Construction

Home prices are high because there aren't enough homes for sale. This shortage has been going on for years and got worse during the pandemic. While prices may level off next year, a big price drop is not expected because of this ongoing building shortage.

2025 Forecast

Home prices are expected to rise at a slower pace next year, which is better than the volatility we've seen recently. While this may be good news for some, it's important to remember that the market can still be unpredictable.

Inventory

The housing market is starting to see more homes for sale. This is partly because of the high mortgage rates, which make buying a home more expensive. Historically, during an election year, many people wait to buy until after the election. 

Home inventory hit a low point early last year but has been increasing since then. This could mean a more balanced market. Recent data shows that 23% of first-time home buyers are waiting until after the election to start their search. 

Is The Market Going To Crash?

2025 is looking better for the housing market. After a slow year in 2024, due to high mortgage rates, more homes are expected to sell next year. While this is good news, don't expect a huge boom - nor is any sort of housing crash expected. Home prices are likely to rise slowly, and the market should be more stable overall.

Today’s market is different from 2008. Though mortgage debt has reached $13 trillion, it’s backed by stronger lending regulations, making it more sustainable. This difference reduces the likelihood of a crash.

Meanwhile, $13 trillion in U.S. mortgage debt is supported by $35 trillion in home equity, making the debt-to-value ratio much healthier than in 2008. Back then, homeowners owed more than their homes were worth, leading to defaults.

Today, the strong equity base and low debt make the market more stable. With many homeowners having low mortgage rates and significant equity, a market crash is highly unlikely, even with economic challenges. This stability is important for anyone looking to buy or invest.

As real estate conversations continue, it’s important to understand how today’s real estate market is different.

Bottom Line

As we look ahead to next year, here are three things you can expect. 

First, total home sales in the country are expected to rise. 

Second, mortgage rates are expected to come down. 

Finally, home prices will likely rise at a more reasonable and healthy rate, reflecting a return to more normal market conditions. 

These are all positive trends to look forward to in 2025 when the market is expected to stabilize with rising sales, better mortgage rates, and steady price growth. Buyers and sellers can anticipate a healthier, more balanced market.