Miami Beach, FL
Optimism about mortgage rates increased sharply in December, according to a monthly consumer survey by Fannie Mae. In fact, for the first time in the history of the survey, more homeowners, on net, believe rates will go down instead of up.
This appears to be kickstarting the housing market. As Altos Research reports, the number of sales happening each week is climbing right along with the inventory.
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13% more new contracts were started this first week of January compared to last year
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4.25% more single-family homes are in contract to close YoY
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New listings are up 9% YoY, though inventory is still tight.
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Altos Research anticipates 15% growth in home sales in 2024 over 2023
My take
We can't tell you how much the housing market will benefit from interest rate cuts and falling mortgage rates. If the Fed follows through on its rate cuts in 2024, we could see a huge improvement in home sales compared to last year. But keep in mind, that it all depends on those rate cuts. We will be keeping a very close eye on all the moves here.