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Happy Independence Day! As we celebrate the 4th of July, let’s dive into the latest in the real estate world. From rising home prices to shifting market dynamics, here’s your Daily Dose of Real Estate. Today, we cover the latest trends in residential and commercial real estate, mortgage rates, regulatory developments, and hot topics that are shaping the market. Whether you’re a buyer, seller, or investor, this comprehensive update will keep you informed and ahead of the curve.
Residential Real Estate: Home Prices and Market Trends
Home Prices Continue to Rise
According to CoreLogic’s latest report, home prices nationwide increased by 4.9% year-over-year in May 2024. The forecast indicates a further rise of 0.7% from May to June 2024 and a 3% increase from May 2024 to May 2025. The Northeast, particularly New Hampshire, leads with a double-digit increase of 12% CoreLogic.
Manhattan’s Market Dynamics
Manhattan is now a buyer’s market. The average real estate sales price fell by 3% to just over $2 million, and the median price dropped by 2% to $1.2 million. Inventory has risen, with over 8,000 apartments for sale, marking a significant shift from the post-COVID high prices CNBC.
New York’s Real Estate Awakening
New York’s real estate market saw a resurgence in Q2 2024 after a sluggish start to the year. Sales in all price categories began to emerge, with a notable increase in inventory. However, high mortgage rates and renovation costs continue to impact the market Forbes.
Mortgage Rates: Current Trends and Predictions
Current Mortgage Rates
As of July 1, 2024, the average rate for a 30-year fixed mortgage is 7.00%, while the 15-year fixed mortgage rate is 6.50%. The 5/1 ARM rate stands at 6.53%. These rates reflect a slight increase from the previous week, indicating ongoing challenges for homebuyers Bankrate.
Future Predictions
Experts predict that mortgage rates will remain elevated through most of 2024. Freddie Mac anticipates rates to stay above 6.5%, while Fannie Mae projects an average rate of 6.8% for Q3 2024. The National Association of Realtors (NAR) expects rates to average 6.9% in Q3 Forbes.
Commercial Real Estate: Market Insights
Construction Costs and Trends
CoreLogic’s July 2024 report highlights ongoing adjustments in construction costs. Labor rates and material prices are expected to see single-digit upward movements due to increased subcontractor expenses. Notably, the Northwest, Southeast, and West Central regions have seen significant increases in general labor rates CoreLogic.
Commercial Lending Outlook
The Mortgage Bankers Association (MBA) forecasts that higher interest rates and market uncertainties will continue to slow commercial and multifamily lending in 2024. However, a moderation in interest rates over the next year and a half could help break the current logjam in transaction activity MBA.
Regulatory Developments
Federal Reserve’s Stance
The Federal Reserve has maintained its higher-for-longer position on interest rates, with no changes expected until at least the end of the year. This stance continues to influence mortgage rates and the broader real estate market Bankrate.
Impact of Presidential Elections
As the presidential election approaches, market activity is expected to slow due to uncertainty. Historically, the latter part of Q3 and early Q4 see reduced activity, with a rebound anticipated post-election Forbes.
Hot Topics and Trends
Affordable Lake Towns
Looking for waterfront living on a budget? Realtor.com highlights the most affordable lake towns in 2024, where homes near lakes can command a 20%-30% price premium but still offer pockets of affordability Realtor.
Energy Costs and Housing Choices
As energy costs rise, considering the cost of energy is becoming increasingly critical when choosing a place to live. States with the highest and lowest energy bills might surprise you and influence your next move Realtor.
Short-Term Rental Hot Spots
The Appalachian region has become a profitable destination for short-term rental investors, with home prices surging due to continued tourist influx Realtor.
Wrap-Up: Navigating the Real Estate Landscape
As we move into the second half of 2024, the real estate market presents a mixed bag of opportunities and challenges. Whether you’re a buyer, seller, or investor, staying informed and adaptable is key to navigating this dynamic landscape. Enjoy the fireworks and have a fantastic 4th of July!
Stay Tuned for More Insights!
Keep reading “The Daily Dose of Real Estate” for your daily updates on the latest trends, market insights, and regulatory developments.
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Best,
Tim