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May 2024 * Market Update

Dated: May 7 2024

Views: 35

The Spring housing market is starting to warm up here in Northern Virginia. The inventory of homes for sale is finally on the rise, as are sales. This April marked the first time we have had more inventory of homes for sale than we did the same month last year. The last time this happened was when there were more houses for sale in April 2015 than in April 2014. That is nine years of month-over-month declines in active houses for sale year over year – it’s pretty amazing to me. In 2014, we had 6,145 homes for sale in Northern Virginia; in 2015, we had 8,247. Since then, the inventory of houses for sale every week and every month has dropped when compared to the previous year. We ended April with just 1,676 houses available to home buyers, and last year, we ended April with 1,529.  

The good news is that with more inventory, we have more sales. Buyer demand is not being deterred by higher rates, at least not yet. We continue to see more than 50 people through houses on the first weekend they are for sale, and we have had as many as 75 people through open houses! Multiple contracts continue to be the norm more than the exception. On another nerdy number note, during the previous three weeks, we had more than 700 contracts written in the previous seven days. This was the first time this has happened since July of 2022. If rates were lower, this number would be substantially higher as more buyers would be coming out of the woodwork to become homeowners.

I previously mentioned that higher rates do not deter buyers. Regarding this statement, everyone should be prepared for rates to stay in this range for the foreseeable future. The economy is doing well, jobs are being created, and inflation is moving higher than expected, so the Fed is not inclined to reduce its rates. As such, mortgage rates are and will stay elevated. If you recall, generally, when the Fed raises the federal funds rate, it can put upward pressure on longer-term interest rates, including the yield on the 10-year Treasury bond, as investors anticipate higher borrowing costs and adjust their expectations for future inflation and economic growth accordingly. Mortgage rates are tied to the 10-year treasury, so with this information, we should expect mortgage rates to stay higher than expected. If you have any questions about this, feel free to reach out to me.

Have a great rest of your spring, and as always, feel free to call us to discuss your situation in more detail if you are looking to sell or buy in this competitive market!

Written by Scott MacDonald
RE/MAX Gateway | Broker/Owner

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Jenifer Morin

Jenifer is a highly motivated and exceptionally organized professional with over 23 years of expertise spanning marketing, advertising, event planning, social media, graphic design, and administrative....

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