Despite record high temperatures over the last few weeks, the arrival of fall is just around the corner, which means a new housing season is approaching. Today, UrbanTurf looks at what we think will be the metrics that will determine the direction of the DC-area market in the coming months.
The path that the chart above takes this fall will largely dictate the direction of the housing market. This week, 30-year mortgage rates hovered around 7.2%, double the 30-year rate from late 2021. While predictions are being made that rates could go down by the end of the year, strong economic data is not helping push rates in that direction.
The effect of high rates can also be seen in the volume of homes coming on the market, or lack thereof. The number of new listings to come online in the DC area in July fell to a level not seen since the early 2000s. Specifically, the number of new homes tracked 34% lower than last year. It is not hard to see why this is happening. Not many owners with a sub-4% interest rate are compelled to list their home for sale when faced with buying a new home with a 7% mortgage.
Despite the headwinds illustrated in the charts above, home prices in the DC area rose by about 6% year-over-year in August. Following a similar increase in July, it marked the first time since 2021 that there were two months in a row of annual price gains. The rise in prices is the result of a small, active pool of buyers competing over a much smaller pool of homes on the market. If owners stay on the sidelines and demand remains moderate, we will see continued price gains this fall.
This article originally published at https://dc.urbanturf.com/articles/blog/the_3_most_important_charts_for_the_fall_housing_market/21436.
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