I have them, do you? What are they? In this context, it is a very low interest rate. It is probably the biggest factor impacting the real estate market; people unwilling to give up their low-rate mortgages and move. This is keeping inventory historically low and therefore keeping sales historically low.
Nationally, the latest data suggests that 74.6% of owners of single-family homes have a rate at or below 5%. That’s around two percentage points from where we are today, but more importantly, 21.6% have a rate at or lower than 3%.
Buyers have for the most part accepted that rates will not be going down substantially anytime soon. Most just want to find their home and move in! Home prices have risen by 4.3% over the past year, compounding affordability challenges amid rising rates. However, the market has shown signs of increased activity. In December 2024, active listings grew by 25%, and sales
transactions increased by 19.8% compared to the previous year, indicating that
buyers and sellers may be adjusting to higher borrowing costs. Despite ongoing
affordability challenges, these trends indicate a slow but steady adjustment to
the shifting conditions in the housing market and what may be the ‘new normal’.