Real Estate Information Archive

Good Monday Morning!

The national Real Estate world was full of facts and non-facts in regards to the recent NAR settlement over brokerage fees. I am doing this article this morning because many clients have had questions over what is going on, and home buyers have been in fear that they will now have to pay fees that they did not have to pay previously in a Real Estate transaction. The truth is that, yes, there will be some changes coming soon, but the overall picture of how we buy and sell Real Estate will change very little for most home sellers and home buyers. This is an ever-changing situation, so there could be some further developments ahead, but as of right now, it is pretty much business as usual. Here is a recent article from "Realtor.com" that briefly goes over the recent decisions.

Misinformation has been pervasive in the media over real estate commissions. Here are the facts you should know.

The national conversation around real estate commissions reached a crescendo in the last week since the National Association of REALTORS® announced a settlement agreement that would resolve litigation brought on behalf of home sellers related to broker commissions. Brokers and agents have their own questions about what comes next for their businesses, while at the same time trying to answer consumer inquiries. And many headlines aren’t separating fact from fiction, feeding misinformation to you and your clients.

Let’s clear the air: There’s no doubt the litigation—including copycat lawsuits that were filed after the Sitzer-Burnett verdict—caused considerable uncertainty in an industry already dealing with the effects of low inventory and interest rate increases. The settlement, which must be approved by a judge, provides a path forward for real estate professionals, REALTOR® associations, brokerages, MLSs and other industry stakeholders. Most importantly, it gives NAR members the chance to refocus on their core mission to support buyers and sellers.

Facts First

There’s much the media has gotten wrong about NAR’s settlement, which would require the association to pay $418 million over four years. Some outlets have suggested that NAR previously set or guided commissions to a standard rate of 6%. Even President Joe Biden, in recent comments, misspoke in suggesting that the settlement makes commissions negotiable for the first time.

You know that is false. NAR does not set commissions, and commissions were negotiable long before this settlement. They are and will remain entirely negotiable between brokers and their clients. And housing prices are dictated by market forces beyond members’ control.

Getting the facts right is important, especially because the settlement agreement is complex. NAR is continuing to engage with media to correct inaccurate reporting about the settlement. Members are also encouraged to refer to official NAR sources, like facts.realtor, for the most accurate and up-to-date information about the settlement and what it means for consumers.

The settlement achieves two important goals: protecting members to the greatest extent possible and preserving consumer choice. The proposed settlement:

1. Resolves claims against NAR and nearly every member; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below.
2. Preserves cooperative compensation as an option for consumers looking to buy or sell a home—as long as such offers of compensation occur off of the MLS.

NAR fought for a release that covered all industry players, but large settlements reached by other corporate defendants shaped the negotiations. Throughout the settlement process, NAR also engaged with a diverse range of members to consider their perspectives and interests.

“Ultimately, continuing to litigate would have hurt members and their small businesses,” NAR Interim CEO Nykia Wright said in a statement. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances. It provides a path forward for our industry, which makes up nearly one-fifth of the American economy, and NAR. For over a century, NAR has protected and advanced the right to real property ownership in this country, and we remain focused on delivering on that core mission.”

The settlement agreement also mandates two key changes to the way members and MLS participants do business.

1. NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS, but they could continue to be an option consumers could pursue off-MLS through negotiation and consultation with real estate professionals.
2. NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written representation agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and for how much.

NAR continues to deny any wrongdoing and maintains that cooperative compensation is in the best interest of consumers. NAR members can use these changes as an opportunity to explain their clients’ options. Both changes would go into effect in mid-July under the terms of the proposed settlement.

NAR considered a range of legal options throughout the litigation process, including reaching a settlement or continuing to appeal the Sitzer-Burnett verdict and litigate the related copycat cases. The latter could have forced the association to file for Chapter 11 bankruptcy protection, leaving members, associations, MLSs and brokerages exposed.

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THIS WEEKS HOT HOME LISTING!

2105 Chambers St, Eugene, OR 

Price: $495,000    Beds: 3    Baths: 2    Sq Ft: 1360

Welcome to this amazing mid-century modern home that has been meticulously updated throughout. Conveniently located just a short distance to restaurants, shopping, park space and highly sought after schools. Updates include a new membrane roof & R-1...View this property >> 

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Good Monday Morning!

At the beginning of this year, national financial experts were mostly in agreement that the Fed would go through a series of interest rates drops in 2024. They thought that with inflation numbers predicted to decline, the Fed would need to do this to get the economy back on track. So far, the Fed has failed to drop rates and has even made it look as if a rate decline program is not in the picture any time soon. Recent unfavorable inflation rates could be putting a stranglehold on Fed rates declining any time soon. With that reality, mortgage interest rates remain around the 7% mark. This is a lower level than a year ago, but this rate remains higher than what many home buyers feel they want to deal with. Many would-be buyers are sitting and waiting for mortgage interest rates to drop, but is that the best route? The following article from "US News" talks about the best direction for home buyers to take.

It's been two years since the Federal Reserve first began its tightening cycle with a series of rate hikes, effectively ending the pandemic-era housing boom. Since then, mortgage rates rose past 5%, 6% and 7% as home prices stayed stubbornly high – a combination that brought housing affordability to its lowest levels in decades. 

The spring 2024 home-shopping season is upon us, and it brings with it a sense of deja vu: Just like in 2023, two-thirds of respondents who plan on buying a home in 2024 are waiting for rates to fall first, according to the second annual Homebuyer Sentiment Survey from U.S. News.

Between Feb. 28 and March 4, U.S. News ran a nationwide survey of 1,200 Americans who are planning to buy a home in 2024 using a mortgage. We asked respondents a series of questions to find out how the mortgage rate environment has impacted their homebuying plans. Here's what we found:

• Two-thirds of homebuyers (67%) are waiting for mortgage rates to drop before buying a home this year. Last year, an equal share of buyers said the same thing – but rates didn't budge. In fact, 67% of this year's buyers put off purchasing a home in 2023 because they were waiting for rates to fall. 
• Among those who are holding out for lower rates, a quarter (26%) want to see them below 5% before buying, which isn't expected to happen in 2024 or even 2025. About half (49%) are willing to wait for more than six months for rates to come down. 
• Three-quarters of current buyers (76%) plan on refinancing to a lower mortgage rate in the future. Additionally, more than a third (36%) are considering borrowing an adjustable-rate mortgage in order to get a lower rate. Both of these strategies come with risks: Those who "buy now, refi later" could be stuck with unaffordable monthly payments while they wait for rates to fall, and those who choose an ARM may be on the hook for higher payments in the future. 
• The vast majority of homebuyers (91%) are at least "somewhat" stressed about buying a home this year, with a quarter (25%) saying they're "extremely" stressed about it. Just a quarter of buyers (26%) say there's enough for-sale housing inventory within their budget in the market where they're buying a home. 
• Over half of 2024 home shoppers (52%) are planning on buying new construction, including 55% of first-time buyers and 45% of repeat buyers. Among them, 61% say they will use their builder's preferred lender, which often comes with added incentives like mortgage-rate buydowns and closing-cost credits.

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THIS WEEKS HOT HOME LISTING!

320 Mountaingate Dr, Springfield, OR 

Price: $114,500    Acres: 0.23

Rare lot availability in the Mountaingate Community. Build your dream home here! Gorgeous mountain and valley views. Lot provides level driveway to garage opportunity, with potential for daylight basement opportunity in the rear of the lot. Nearby p...View this property >> 

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Good Monday Morning!

February of this year saw closed home sales and pending sales tick upwards in the Eugene and Springfield area.  Could this be seasonal, or is it a long-term positive sign for our local Real Estate market? Mortgage interest rates remain just below the 7% mark, which is up from this time last year but about a percentage point below several months ago. The overall economy remains about the same, but inflation continues, but at a slower pace than last year. The hope is that the Fed will lower rates at their next meeting. Slightly lower rates could give our Spring housing market a boost. We remain in a volatile housing market, and it is just tough to determine exactly where it is headed. The inventory of homes remains low, and my advice to anyone thinking of selling a home this year is to not wait. Right now, we seem to have more home buyers than we have home listings in our market. My suggestion would be to take advantage of this. The following are the home sales statistics for Lane County in the month of February 2024.

New Listings

New listings (356) increased 24.9% from the 285 listed in February 2023, and increased 25.8% from the 283 listed in January 2024.

Pending Sales

Pending sales (335) increased 21.8% from the 275 offers accepted in February 2023, and increased 29.8% from the 258 offers accepted in January 2024.

Closed Sales

Closed sales (238) increased 3.5% from the 230 closings in February 2023, and increased 37.6% from the 173 closings in January 2024.

Inventory and Time on Market

Inventory decreased to 2.3 months in February. Total market time increased to 76 days.

Year-to-Date Summary

Comparing the first two months of 2024 to the same period in 2023, new listings (640) increased 7.9%, pending sales (585) increased 3.4%, and closed sales (419) increased 2.2%.

Average and Median Sale Prices

Comparing 2024 to 2023 through February, the average sale price has increased 3.8% from $449,000 to $466,100. In the same comparison, the median sale price has increased 2.4% from $415,000 to $425,000.

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THIS WEEKS HOT HOME LISTING!

2434 E Irwin Way, Eugene, OR 

Price: $365,000    Beds: 3    Baths: 1.5    SqFt: 1056

This single level ranch style home is located on a quiet street near Irwin Park and the Golden Garden Pond. RV parking and an attached 2-car garage with built-in storage. Vinyl windows, newer carpet & vinyl, large fenced yard with a patio...View this property >> 

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Good Monday Morning!

Mortgage interest rates have gone up recently, but they are remaining below the highs in late 2023. There is a silver lining to this trend, though. With rates up slightly, demand for housing is down, and home inventories are beginning to creep higher. With more competition and less demand, home owners trying to sell their homes are becoming more motivated. This is something that we have not seen take place in our local Eugene and Springfield housing market for years. The recent tick-up in mortgage rates is not enough to have a large effect on payments, but is it enough to have an effect on what you might have to pay for a home? The other side of this is that there are simply more homes to choose from. For many interested home buyers, this is a great time to jump back into the market and start looking at homes. The following is an update on recent market trends that affect home purchases.

Mortgage interest rates rose for a fourth consecutive week, increasing the chances of a challenging spring homebuying season for buyers already struggling with affordability.

The 30-year fixed-rate mortgage averaged 6.94% this week, up from last week's 6.9% and hitting a two-month high, according to the latest Freddie Mac survey. The 15-year rate dipped slightly, falling from 6.29% to 6.26%.

Rising 30-year rates are already dampening homebuyer momentum heading into spring, said Sam Khater, Freddie Mac's chief economist.

"While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines," Khater said.

The resilient economy is keeping rates higher, prompting economists to reconsider expectations about interest rate cuts, which typically impact the direction of mortgage rates. Some forecasts had predicted rate cuts as early as this spring, but it appears unlikely that the Federal Reserve will take any action until later in the year.

Bright MLS Chief Economist Lisa Sturtevant, for one, is now expecting rate cuts to happen this summer rather than in the spring.

"This Friday's employment report, which likely will include a revision to January's robust numbers, will be key to watch for guidance on the timing of Federal Reserve action," Sturtevant said.

The Fed isn't providing many hints about when cuts could happen. In a speech on Feb. 28, New York Federal Reserve President John Williams said that while there is still some work to do, the door is opening to interest rate cuts "this year," depending on data, according to Reuters.

Without providing a timeline, Williams did suggest that three cuts could be coming sometime this year.

"While the economy has come a long way toward achieving better balance and reaching our 2% inflation goal, we are not there yet," Williams said.

Inventory is building, but mortgage applications haven't picked up yet

The one bit of good news for buyers is that elevated mortgage rates are allowing more inventory to build. Redfin's weekly report noted that new listings rose 13% year-over-year during the four weeks ending Feb. 25, the biggest jump in nearly three years.

And Altos Research noted in its weekly report that there are more sellers and fewer buyers heading into spring. Price reductions also ticked up this week for the first time since November, said Altos Founder Mike Simonsen. That doesn't mean home prices are necessarily falling yet, but they are softening.

"It is simply very clear evidence of how homebuyers wait when mortgage rates stay higher for longer," Simonsen said.

According to the company's research, there are 498,000 single-family homes for sale, which is 16% higher than last year but below pre-pandemic levels for this time of year.

Even as inventory has picked up, higher mortgage rates have stalled loan activity, said Mike Fratantoni, chief economist at the Mortgage Bankers Association.  

Applications for mortgages decreased by 5.6% from a week earlier, according to MBA data. Purchase applications were down 12% compared to a year ago.

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THIS WEEKS HOT HOME LISTING!

1879 Adelman Loop, Eugene, OR 

Price: $420,000    Beds: 3    Baths: 2.5    SqFt: 1888

This adorable home is turnkey ready and features an open two-story floor plan, that's nestled in a charming neighborhood, with close proximity to a park. This 3-bedroom, 2.5-bath home offers an open concept with a large living space that leads to th...View this property >> 

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Good Monday Morning! 

Many homebuyers are choosing to wait in regards to purchasing a home. They are doing this in hopes of seeing mortgage interest rates drop over the months ahead.  My thoughts are that this may not be the best strategy. First of all, there is no promise that mortgage rates will decline soon. It has been widely publicized that we will see mortgage rates drop later this year. This could be wishful thinking as we watch inflation rates continue to climb and our overall economy is not fairing well.  At the same time, the government continues out-of-control spending, which will only further the risk of continued high inflation rates. The other unknown is the price of housing. We continue to see inflation with home prices and low inventories. My guess is that home prices will most likely not go down any time soon, and we may see home prices continue to increase as a part of our national inflation problem. My suggestion for homebuyers at this time would be to get serious about purchasing a home soon. Purchasing a home now may be a great financial decision. The thought of buying now and not risking higher home prices or even higher mortgage interest rates makes sense. If mortgage rates do decline, refinance! The following is an article from "NAR" that talks about why making a home purchase now may be a wise decision.

Mortgage rates edged up this week, prompting a pause among some would-be house hunters. But here’s why they may not want to wait.

Home shoppers are sensitive to mortgage rates, which was made clear this week with an increase in the average for the 30-year fixed-rate mortgage. The rate rose to 6.77%, and mortgage applications for home purchases fell 3%, according to the Mortgage Bankers Association.

Every notch up and down in rates can impact home buyers’ purchasing power, but borrowing costs have largely stabilized. “While mortgage interest rates edged up weekly, the overall trajectory from fall 2023 is down and is now a full percentage point below the recent high” when rates neared 8%, says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “While mortgage interest rates may come down to the low 6% range in the middle to later part of the year, buyers must weigh what makes the most sense for them. Timing the real estate market based purely on mortgage interest rates—especially marginal changes—rarely works when new babies, marriages and jobs are the real decision-makers.”

Buyers may not save much by waiting, either. Home buyers purchasing the typical home at $400,000, with a 20% down payment, would likely have a monthly mortgage payment of about $2,080 at this week’s rate average, Lautz says. Last week, when rates averaged 6.64%, home buyers could have paid about $70 less per month—but that was based on a median home price of $391,700.

Home prices are rising quickly. The median price of an existing home surged to an all-time high in December, according to NAR, and prices are expected to continue to climb. The annual median home price is predicted to increase by 1.4% this year, and by another 2.6% in 2025, to $405,200, NAR’s forecast shows. Plus, housing inventory remains at historical lows and remain a major obstacle for would-be home buyers. That will keep pressure on home prices, economists say.

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THIS WEEKS HOT HOME LISTING!

1011 S 8th Street, Cottage Grove, OR 

Price: $337,500    Beds: 3    Baths: 1.0    SqFt: 1008

This adorable single level home was completely remodeled in 2019 and has been refreshed from top-to-bottom! Updates include a 30-year composite roof, vinyl windows and laminate flooring. The kitchen is open to the family room and has been tastefully...View this property >> 

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Good Monday Morning!

Locally and nationally, new home starts have taken a huge hit as of late. Housing starts are off in large numbers, and this is one of the key indicators as to where our local and national economy is currently at. In Lane County, building permits for new construction are at a standstill.  Just look around at the number of new houses you see under construction. It is minimal. We are experiencing low housing starts, and at the same time, our nation has never had a larger shortage of housing. A sluggish economy, high mortgage interest rates, the high cost of land, high building material costs, high labor costs, high SDC charges, high property taxes, and expensive homeowner insurance have all contributed to the crash in new home construction. The remedy for this situation is complex, and most likely we will not see a rapid change in new home construction numbers any time soon. Lower inflation numbers and a decline in mortgage loan interest rates would be a good start to bringing back our new home industry. The following is an article from "Realtor.com" that talks about the decline in new home starts nationally.

The numbers: Construction of new U.S. homes fell 14.8% in January as home builders scaled back new projects.

The pace of construction slowed as builders curtailed their activity amid wintry weather in the U.S. in January.

Housing starts fell to a 1.33 million annual pace from 1.56 million in December, the government said Friday. That’s how many houses would be built over an entire year if construction took place at the same rate every month as it did in January.

Housing starts fell to the lowest level since August 2023.

The drop in January was the sharpest since April 2020, during the coronavirus pandemic, when starts fell by nearly 27%. Not including that pandemic drop, housing starts fell by the most since 2015.

The data fell short of expectations on Wall Street, where the expected rate was 1.45 million. The numbers are seasonally adjusted.

Single-family and multi-family construction fell in January, with the latter registering a nearly 36% drop.

But in a more recent survey of builders in January, builders were upbeat about future sales of new homes and optimistic about demand, as they expect interest rates to fall through the rest of the year.

Building permits, a sign of future construction, fell 1.5% to a 1.47 million rate.

Key details: Builders scaled back construction of new single-family homes, leading to a 4.7% drop, as well as apartments, which fell 35.8%.

The only region where builders increased construction was the Northeast, where single-family starts rose 26.7%. Every other region posted a drop in January.

Permits for single-family homes rose 1.6% in January, while apartment permits fell 9%.

Big picture: Housing starts are generally a volatile data series, but the data indicate that that builders slowed down construction of new homes in January.

But most builders are optimistic about the future, as seen in a recent survey, and expect falling mortgage rates to boost home-buying demand.

Meanwhile, builders continue to benefit from the tailwind that is the persistent shortage of previously owned homes. While new homes only formed a tenth of overall sales historically, that share has jumped to 30%, the National Association of Home Builders told MarketWatch.

What are they saying? “Housing starts fell by the largest amount since April 2020 in January, led by a huge drop in multi-family starts. We suspect the multi-family sector will continue to be a drag on new development this year, given the huge number of multi-family units already under construction,” Thomas Ryan, property economist at Capital Economics, wrote in a note.

“The sharp pullback in starts could reflect bad weather in January,” Ali Jaffery at CIBC Economics, wrote in a note. But as mortgage rates inch up, “housing activity should remain weak until the Fed signals a more clear intent to ease policy,” he said.

Have An Awesome Week!

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THIS WEEKS HOT HOME LISTING!

4391 N Shasta Loop, Eugene, OR 

Price: $450,000    Beds: 4    Baths: 2.5    SqFt: 2154

This diamond in the rough is perfect for an investor looking for a project or an owner looking to create their own oasis in a quiet South Eugene neighborhood. This is an eclectic home from the 1970's with natural wood, vaulted ceilings and great sep...View this property >> 

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Good Monday Morning!

The January 2024 Real Estate market in the Eugene and Springfield area improved some over December 2023 but decreased from January 2023. All categories were off from one year ago. The only real positive news is that the inventory of homes for sale is creeping up. Interest rates took a dip for a short period of time in December and January, but have inched back up as of late. The outlook for an improved housing market right now hinges on mortgage interest rates declining again and an improvement in our nation's economy. A bright spot right now is that, with the improved housing inventory, we are having a much easier time finding homes for our clients. We are also finding many sellers who are more motivated and willing to pitch in with paying buyers closing costs, etc. This is something that we have not seen happen in years. There is always a bright spot if you look for it. The following are the home sales numbers for Lane County for the month of January 2024.

New Listings

New listings (283) decreased 6.6% from the 303 listed in January 2023, and increased 59.9% from the 177 listed in December 2023.

Pending Sales

Pending sales (258) decreased 14.9% from the 303 offers accepted in January 2023, and increased 24.0% from the 208 offers accepted in December 2023.

Closed Sales

Closed sales (173) decreased 2.3% from the 177 closings in January 2023, and decreased 19.5% from the 215 closings in December 2023.

Inventory and Time on Market

Inventory increased to 3.2 months in January. Total market time increased to 68 days.

Year-to-Date Summary

Comparing the first month of 2024 to the same period in 2023, new listings (283) decreased 6.6%, pending sales (258) decreased 14.9%, and closed sales (173) decreased 2.3%.

Average and Median Sale Prices

Comparing 2024 to 2023 through January, the average sale price has decreased 2.1% from $470,600 to $460,800. In the same comparison, the median sale price has decreased 1.0% from $419,000 to $415,000.

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THIS WEEKS HOT HOME LISTING!

4927 Morely Loop, Eugene, OR 

Price: $330,000    Beds: 3    Baths: 2.0    SqFt: 1518

This updated home is on its own lot & doesn't have any HOA fees. It's located on a quiet street with a treed view in the backyard. Open floor plan with vaulted ceilings, skylight in the kitchen, laminate flooring and vinyl windows. Sliding French ba...View this property >> 

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Good Monday Morning!

After years of historically low mortgage interest rates, the Fed began a systematic increase in rates, which in turn influenced the mortgage market and sent rates soaring. Mortgage rates peaked in the Fall of 2023 before they began to subside in the Winter of 2023. Today, rates have declined significantly, and there are mixed thoughts as to where mortgage rates may be headed in 2024. The following article from NAR gives their opinion on the 2024 mortgage rate situation. Only time will tell, but one thing is most likely for sure, and that is that we most likely won't see a return of 8% mortgage rates in 2024. This is great, but further declines in mortgage rates in 2024 would be even better.

Although the Fed’s rate does not directly impact mortgage rates, it often influences them

Jessica Lautz, deputy chief economist at the National Association of REALTORS®, anticipates mortgage rates to remain in the 6% range for most of the year. “While this is certainly higher than the historic lows seen in 2020 and 2021, this is lower than the historical norm of 7.74%,” Lautz says.

With less volatility in mortgage rates, consumers may feel more confident to resume house hunting. Last fall, mortgage rates surged to nearly 8%, shaking buyer confidence and causing home sales to dip. This week’s 6.63% average translates to about $251 less for a typical monthly mortgage payment compared to fall when rates hit a peak, Lautz says.

Mortgage rates have held relatively stable for nearly two months, which is bringing more buyers back into the housing market, says Sam Khater, Freddie Mac’s chief economist. Further, “the economy continues to outperform due to solid job and income growth, while household formation is increasing at rates above pre-pandemic levels,” he says. “These favorable factors should provide fundamental support to the market in the months ahead.”

Lower mortgage rates are helping to improve housing affordability, adds NAR Chief Economist Lawrence Yun. Pending home sales rose 8.3% in December and are now higher than a year ago, NAR’s latest housing report shows.

Homeowners also may find more incentive to sell. “Many delayed home sellers may be willing to give up 3% to 4% rates as life circumstances have changed, thereby boosting inventory,” Yun says. “Home sales will no doubt rise this year.” NAR is forecasting a 13% increase in existing-home sales compared to 2023. That rising trend is expected to continue into 2025, with another 15.8% uptick, NAR notes.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

1011 S 8th Street, Cottage Grove, OR 

Price: $345,000    Beds: 3    Baths: 1.0    SqFt: 1008

This adorable single level home was completely remodeled in 2019 and has been refreshed from top-to-bottom! Updates include a 30-year composite roof, vinyl windows and laminate flooring. The kitchen is open to the family room and has been tastefully...View this property >> 

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Good Monday Morning!

Does a change in mortgage interest rates have an effect on home sales? You bet it does! Inflation in home prices over the past several years has made home ownership an impossibility for many would be home buyers. The high cost of homes was compensated for over the past years by record breaking low mortgage interest rates. When rates began to rise but home prices remained steady and even increased, the ability to purchase a home for many faded away. Even though mortgage rates are higher than they were even a year ago, they have dropped from their peak in the Fall of 2023. Even a 1% rate decrease has spurred interest and made home payments more affordable. The question we have is whether rates will decline further, hold steady, or maybe even rise again. The answer here depends on what happens with our national economy. Mortgage rates need to decline further to heat up our economy again, but this could bring back high inflation rates. Higher inflation rates could put the brakes on any further mortgage interest rate decreases. It's going to be interesting! Stay tuned! The following is an article from "Realtor.com" that talks about the present housing market.

The numbers: U.S. pending home sales shot up in December as falling mortgage rates brought buyers back into the market.

Pending home sales rose 8.3% in December from the previous month, according to the monthly index released Friday by the National Association of Realtors.

Pending home sales reflect transactions where the contract has been signed for a the sale of an existing home, but the sale has not yet closed. Economists view it as an indicator of the direction of existing-home sales in subsequent months.

The jump in pending-home sales was the largest since June 2020, when it rose by 14.9%.

The sales pace exceeded expectations on Wall Street. Economists were expecting pending home sales to increase by 2% in December.

Transactions were up 1.3% from last year.

The NAR also released an updated forecast for existing-home sales on Friday. The group expects existing-home sales to increase in 2024 by 13% from last year, to a 4.62 million pace.

They expect the U.S. Federal Reserve to cut interest rates four times in 2024 and the 30-year mortgage to “bounce along” in the 6% to 7% range for most of the year.

Big picture: The increases in contract signings and in mortgage applications, reported earlier in the week, indicate that there is pent-up demand from buyers who are motivated by falling mortgage rates.

But the housing market’s recovery is still limited by supply. Unless the so-called lock-in effect fades and more homeowners decide to sell their homes, sales will not be able to increase significantly.

What the realtors said: “The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” Lawrence Yun, chief economist at the NAR, said in a statement.

“Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand,” he added.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

2434 E Irwin Way, Eugene, OR 

Price: $365,000    Beds: 3    Baths: 1.5    SqFt: 1056

This single level ranch style home is located on a quiet street near Irwin Park and the Golden Garden Pond. RV parking and an attached 2-car garage with built-in storage. Vinyl windows, newer carpet & vinyl, large fenced yard with a patio...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

Here we are in early 2024 and has anything really changed with the housing market, both here in the Eugene and Springfield area and nationally? The answer is a flat, NO! But, I believe we are on the edge of change and it could start showing more in the next few months if the prediction of falling mortgage interest rates become reality. This will be very positive, but there is a black cloud hanging over all national housing markets. That black cloud is inflation. Even with a slower market, home prices have continued to increase and with a faster paced market potentially on  the horizon, it could fuel inflation in home prices even further. Typically, when we see a slower market with less demand, we see home prices decline and in our current market, we should have seen sharp declines in home prices. This just has not been the case. The issue here is that rising home prices will continue to keep many first time home buyers out of the market. It is important to remember that all housing market booms are created by affordable housing and a surge in home sales to first time home buyers. The following is a recent article from "NAR", that talks about the recent housing market nationally and regionally.

Existing-home sales likely bottomed out in December, says NAR’s chief economist, who predicts brighter days ahead.Existing-home sales fell to their lowest level in nearly 30 years in December—but that didn’t cool red-hot home prices, with the median price reaching an all-time high of $389,800, the National Association of REALTORS® reported Friday.

Existing-home sales—which include completed transactions for single-family homes, townhomes, condos and co-ops—declined 1% month over month in December and are down 6.2% compared to a year earlier, NAR’s latest sales index shows. But lower mortgage rates, which are now below historical norms, likely will set the stage for stronger sales in 2024, NAR predicts.

“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” says NAR Chief Economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in the upcoming months.”

But home buyers nationwide are still facing a dearth of options. Total housing inventory at the end of December was down 11.5% from November, remaining at historical lows. Many would-be sellers are reluctant to trade in their super-low mortgage rates from just a couple of years ago and make a move at today’s higher rates and home prices. This “lock-in effect” has been blamed for subduing housing inventory, along with sluggish new-home construction that economists say isn’t keeping pace with demographic needs. 

With home prices continuing to surge, homeowners are watching their equity grow. Yun says 85 million homeowners saw gains in housing wealth last month. The average U.S. homeowner with a mortgage has built more than $300,000 in equity since their purchase date, according to CoreLogic’s equity report. 

However, “the recent rapid, three-year rise in home prices is unsustainable,” Yun says. “If prices continue at the current pace, the country could accelerate into ‘haves’ and ‘have-nots.’ Creating a path towards homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”

Homes Still Selling Fast, More Inventory Coming

Builders are trying to ramp up construction, but there are production swings from month to month. Housing construction fell 4.3% in December but remains above 1 million units, the Commerce Department reported this week. Single-family housing permits—a gauge of future construction—posted an uptick last month, indicating that more new inventory is on the way. Still, it’s likely to be a challenging year for new-home construction due to higher mortgage rates and tight monetary policy, says Alicia Huey, chair of the National Association of Home Builders.

“Moderating mortgage rates are expected to provide a boost to new-home construction in 2024, but an uptick in building material prices and a shortage of buildable lots and skilled labor are serious challenges for home builders,” adds Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.

In the existing-home market, homes continue to sell fast. Fifty-eight percent of those sold in December were on the market for less than a month, NAR’s latest research data shows. NAR has predicted a stronger housing market for 2024. Here are more key housing indicators from NAR’s December report:

•  Days on the market: Properties typically remained on the market for 29 days, up slightly from 26 days a year earlier.
•  First-time home buyers: First-time home buyers comprised 29% of sales, down from 31% in November.
•  All-cash sales: All-cash sales comprised 29% of transactions, up slightly from last year’s 28%. Individual investors and second-home buyers make up the biggest bulk of all-cash sales, accounting for 16%, NAR’s data shows.

Regional Breakdown

The following is a closer look at how existing-home sales fared across the country in December:

•  Northeast: Sales remained flat compared to November but were down 9.6% compared to a year earlier. Median price: $428,100, up 9.4% from the previous year.
•  Midwest: Sales fell 4.3% from the prior month, reaching an annual rate of 900,000. Sales are down 10.9% from last year. Median price: $275,600, up 5.9% from December 2022.
•  South: Sales fell 2.8% from November to an annual rate of 1.72 million. Sales are down 4.4% when compared to the prior year. Median price: $352,100, up 3.8% from one year ago.
•  West: Sales rose 7.8% from a month ago, reaching an annual rate of 690,000 in December. Sales are down 1.4% from the year prior. Median price: $582,000, up 4.8% from December 2022.     

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

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AND HERE'S YOUR MONDAY MORNING COFFEE!!