Sluggish Start to U.S. Spring Homebuying Season
By Alex Veiga
Home sales fell in March with rising mortgage rates, analysts said. The supply of homes on the market remains below the historical average.
LOS ANGELES — The spring homebuying season is off to a sluggish start as home shoppers contend with elevated mortgage rates and rising prices.
Sales of previously occupied U.S. homes fell 4.3% in March from the previous month to a seasonally adjusted annual rate of 4.19 million, the National Association of Realtors said Thursday. That’s the first monthly decline in sales since December and follows a nearly 10% monthly sales jump in February.
Existing home sales also fell 3.7% compared with March last year. The latest sales still came in slightly higher than the 4.16 million pace economists were expecting, according to FactSet.
Despite the pullback in sales, home prices climbed compared with a year earlier for the ninth month in a row. The national median sales price rose 4.8% from a year earlier to $393,500.
While the supply of homes on the market remains below the historical average, the typical increase in homes for sale that happens ahead of the spring homebuying season gave home shoppers a wider selection of properties to choose from.
At the end of last month, there were 1.11 million unsold homes on the market, a 4.7% increase from February and up 14.4% from a year earlier, the NAR said.
Even so, the available inventory at the end of last month amounted to a 3.2-month supply, going by the current sales pace. That’s up from a 2.9-month supply in February and a 2.7-month supply in March last year. In a more balanced market between buyers and sellers, there is a 4- to 5-month supply.
“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said Lawrence Yun, NAR chief economist. “There are nearly 6 million more jobs now compared to pre-covid highs, which suggests more aspiring home buyers exist in the market.”
Mortgage rates have mostly drifted higher in recent weeks as stronger-than-expected reports on employment and inflation stoked doubt among bond investors over how soon the federal reserve will move to lower its benchmark interest rate.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, but also hasn’t gone below the 6.6% it averaged in mid-January. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford.
Mortgage rates are influenced by several factors, including how the bond market reacts to the federal reserve’s interest rate policy and the moves in the 10-year treasury yield, which lenders use as a guide to pricing home loans.
The yield on the 10-year treasury jumped to around 4.66% on Tuesday — its highest level since early November — after top officials at the federal reserve suggested the central bank may hold its main interest steady for a while. The central bank wants to get more confidence that inflation is sustainably heading toward its target of 2%.
Born
Daniel Chester French (sculptor) – 1850
Stanley Marcus (retailer) – 1905
Lionel Hampton (jazz musician) – 1908
Ryan O'Neal (actor) – 1941
Jessica Lange (actress) – 1949
Don Mattingly (baseball player) – 1961
Felix Baumgartner (daredevil) – 1969
Shemar Moore (actor) – 1970
Joey Lawrence (actor) – 1976
Funny Cide (thoroughbred race horse, won the Kentucky Derby and Preakness Stakes in 2003) – 2000
Welcome to TheFloridaCoast.com; I would like to introduce myself, my name is Mark Hoeft I am a Florida Real Estate Broker & Owner of The Florida Coast Realty Pensacola LLC in Pensacola, Pensacola Beach, & Gulf Breeze Florida, I also the proud owner of The Florida Coast Realty West Palm & The Florida Coast Realty Destin Florida. It would be my honor to help you find your slice of Florida's beautiful Emerald Coast that you've been searching for. Whether you are looking for your primary home, a second home, or investment property for your Real Estate portfolio on Florida's beautiful Gulf Coast. I specializing in Beach Homes, Condos, and Townhouses. I use my 20 years of knowledge and dedication to hard work to make your real estate transaction as smooth as possible. I've become a leader in buying and selling Pensacola Real Estate, Scenic Gulf Breeze Homes, and Pensacola Beach Condos & Homes. I pride myself in my professionalism and expertise. I've closed over 350 real estate transactions and have totaled more than $40,000,000.00 in sales during the past 20 years.
saturDAY, APRIL 20, 2024
Advice of the DaY
Rivers (or other water) in your dreams suggest your emotional state.
Realtor.com® February Rental Report: Renting Now Beats Buying in All of the Largest U.S. Metros
SANTA CLARA, Calif., March 26, 2024 /PRNewswire/ -- Elevated mortgage interest rates, still-high home prices and falling rents have made it more affordable to rent than buy in all of the top 50 U.S. metros, according to the Realtor.com® Rental Report released today. In February, the mortgage payment on a starter home in the largest metros cost $1,027 (+60.1%) more than the monthly rent in those markets, on average. At the same time last year, 45 metros favored renting.
The top 10 metros with the largest rent versus buy savings (see below for top 50 metros):
1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (141.5% difference)
2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121.1%)
3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99.0%)
4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (95.5%)
5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (89.7%)
6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (86.7%)
7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86.0%)
8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84.4%)
9. Sacramento-Roseville-Folsom, Calif. – $1,514 (82.1%)
10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80.0%)
"With rents continuing to fall and the cost of buying a home remaining high, exacerbated by the rise in mortgage rates in the later half of 2023, renting a home is now a more cost-effective option in all major U.S. markets," said Danielle Hale, Chief Economist at Realtor.com®. "Deciding whether to rent or buy often goes beyond a financial advantage though, and likely depends on a consumer's circumstances. Renters often prize flexibility while the biggest reasons homebuyers cite are that they want a place of their own and to be closer to family and friends. The financial scales have tipped monthly costs in favor of renting over buying, but it does not bring the benefit of housing wealth gains over time that owning does and movers should consider their long-term housing plans and personal situation as they make this decision."
The overall advantage of renting continues to grow in most markets
In February, the cost of buying a starter home in the top 50 metros was $1,027 (60.1%) higher than renting one; comparatively, the cost to buy was $865 higher than renting in February 2023 – a $162 higher monthly savings from renting compared to the prior year. The savings are mostly driven by declining rent prices and higher buying costs, especially interest rates – the 30-year fixed mortgage rate remained elevated at 6.78% in February 2024 compared to 6.26% 12 months ago.
The advantages of renting have become more pronounced across the top metros. Looking specifically at the top 10 metros that favor renting over buying, the average monthly costs for buying a starter home were $1,950 (95.6%) higher than rents – nearly double the cost. Those metros are mostly markets with a higher concentration of tech workers and high earners, where both the average rent and buy costs are higher than the national average.
Renting beats buying in all major metros, especially in south and west; five metros flip from last year
In February, median rents fell across all unit sizes. Despite seven months of annual rent declines, median rents are still $252 (17.3%) higher than the same time in 2020, before the onset of the pandemic. Last February, 45 metros favored renting, but over the past 12 months Memphis, Tenn, Birmingham, Ala., Pittsburgh, St. Louis and Baltimore metros flipped from favoring buying to favoring renting. Four out of five of those markets were among the top markets seeing a high share of investor activity, which may have accelerated the growth of home prices there and increased the overall costs of buying a home, tilting those markets further toward favoring renting over buying.
Austin, Texas, where the monthly cost of buying a starter home was $3,695 – 141.5% more than the monthly rent of $1,530, for a monthly savings of $2,165 – topped the list of markets most favoring renting. Other top markets favoring renting over buying were Seattle, Phoenix, San Francisco and Los Angeles. Metros with diminishing rental advantages were San Jose, Calif.; Dallas; San Francisco; Columbus, Ohio; Miami; and Minneapolis.
Methodology
Rental data as of February 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The monthly cost of buying a home was calculated by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. Monthly buying costs assume a 8% down payment, with a mortgage rate of 6.78%, and include taxes, insurance and HOA fees.
With the release of its January 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since January 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
Mark Hoeft ~ 850-525-2765 ~ Mark@TheFloridaCoast.com ~ The Florida Coast Realty Pensacola
Died
George Clinton (became first U.S. vice president to die in office) – 1812
Bram Stoker (author) – 1912
Benny Hill (comedian) – 1992
Christopher Robin Milne (son of A.A. Milne, basis for the Winnie the Pooh character Christopher Robin) – 1996
Dorothy Height (civil rights activist; she stood on the platform with Dr. Martin Luther King Jr. during his historic I Have a Dream” speech”) – 2010
Events
Hot Springs Reservation (now National Park) was established in Arkansas– 1832
French scientists Pierre and Marie Curie isolated radium chloride from pitchblende– 1902
Boston’s Fenway Park hosted its first professional baseball game. The Boston Red Sox played the New York Highlanders (now the Yankees).– 1912
Electron microscope demonstrated to public– 1940
Pierre Elliott Trudeau was sworn in as 15th Prime Minister of Canada– 1968
54-pound 8-ounce freshwater drum caught in Nickajack Lake, Tennessee– 1972
During a fishing trip, an upset swamp rabbit approached President Carter’s boat, Plains, GA– 1979
Tony Gemignani spun 17.6 ounces of dough for 2 minutes to form pizza base 33.2 inches wide, in Minneapolis, Minnesota– 2006
New York Yankee’s Aaron Hicks threw 105.5 mph ball from left field, setting baseball record– 2016