Today, we are going to delve into the exciting world of real estate. Whether you are a seller or a buyer, the market can be a rollercoaster ride of emotions and decisions. In this blog post, we will explore some key aspects of real estate that sellers and buyers should be aware of.Let's start with the sellers. Selling a property can be both exhilarating and overwhelming. To ensure a successful sale, it is crucial to make your home as appealing as possible to potential buyers. Consider staging your property to showcase its best features and create a welcoming atmosphere. Additionally, it is important to price your home accurately to attract serious buyers. Working with a knowledgeable real estate agent can be immensely helpful in navigating the selling process and obtaining the best deal for your property.On the other hand, buyers face their own set of challenges in the real estate market. With the ever-changing trends and fluctuations in prices, it is essential for buyers to do their due diligence. Research the market thoroughly and establish a clear budget before starting your search. It is also vital to have a clear vision of your needs and priorities in a property. Are you looking for a specific location, size, or amenities? These factors will help you narrow down your options and make a more informed decision.Regardless of whether you are a buyer or a seller, the length of time a property stays on the market is always a concern. For sellers, a property sitting on the market for too long can be frustrating and costly. To speed up the sale process, consider working with a real estate agent who has a proven track record of selling properties quickly. For buyers, properties that have been on the market for an extended period may offer negotiation opportunities. However, it is crucial to investigate the reasons behind the property's extended listing time to ensure you are making a sound investment.In conclusion, whether you are a seller or a buyer, the real estate market can be an exciting yet challenging journey. By understanding the dynamics of the market and working with professionals, sellers can achieve a successful sale, while buyers can find their dream property. Remember, real estate transactions involve significant financial investments, so it is crucial to approach the process with knowledge, patience, and the right guidance.

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Have you ever come across a real estate listing that is blank? Well, here's one - San Jose, CA 95113, with a listing price of 23 and a null description. The lack of information on this listing has sparked various speculations and interests in the real estate industry.San Jose is the largest city in Silicon Valley, home to various tech giants such as Google, Apple, and Facebook. With its booming economy, it's no surprise that the real estate market in San Jose is highly competitive. The average listing price for homes in San Jose is around $1.2 million, making this listing at 23 dollars almost laughable. However, some have theorized that the listing price is a mere placeholder and not the actual selling price.Another theory is that the listing might be a mistake or a prank. It's not uncommon for real estate agents to make errors, and it's possible that the listing might have been accidentally posted with incomplete details. On the other hand, some believe that the listing might be a prank by a mischievous agent or homeowner. Whatever the case, the lack of information has only fuelled the imagination of those in the real estate industry.Despite the mystery surrounding the listing, one thing is for sure - the location is prime. San Jose 95113 is a zip code in the heart of downtown San Jose, surrounded by various amenities and entertainment options. The zip code is home to the San Jose Convention Center, the SAP Center (home to the San Jose Sharks and various concerts), and the Tech Museum of Innovation. Additionally, there are various restaurants, shops, and parks within walking distance, making it an ideal location for those who love city living.In conclusion, the listing in San Jose, CA 95113 is a curious case that has left the real estate industry scratching their heads. While it's unclear why the listing lacks information, one thing is for sure - the location is enviable. Whether it's a mistake, a prank, or a placeholder, we'll have to wait and see. Who knows? It might be the ultimate bargain of a lifetime.

The net monthly job addition averaged 116,000 from 3 months to August. That is light. It even suggests the possibility of turning net negative in the upcoming months if the economy hits an unexpected speed bump. The softening job figures suggest that the Federal Reserve will cut interest rates in mid-September, again on the day after the election, and possibly four more times in 2025. The long-term bond and mortgage markets have already incorporated these upcoming changes. That is why the average mortgage rate is 6.3%, measurably lower than the 7% to 8% seen in the past 18 months. Mortgages with full government guarantees, like FHA and VA loans, are already below 6%. Historically, outside of the Great Recession in 2008-2010, which was led by a housing market downfall, the weakening job market does not negatively affect home sales or prices if accompanied by falling interest rates.  With the unemployment rate at 4.2% in August, over 90% are employed, and around 70% consider themselves to be in a secure job. Therefore, falling mortgage rates exert more power than a weakening job situation. Let’s see if that holds again. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-total-payroll-jobs-january-2020-to-september-2024-bar-graph-09-06-2024-1280w-720h.png?itok=684GA9TT" class="b-lazy" width="1200" height="675" alt="Bar graph: Total Payroll Jobs, January 2020 to September 2024" title="Bar graph: Total Payroll Jobs, January 2020 to September 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-monthly-net-payroll-job-additions-january-2022-to-august-2024-bar-graph-09-06-2024-1280w-720h.png?itok=tjcOrnhk" class="b-lazy" width="1200" height="675" alt="Bar graph: Monthly Net Payroll Job Additions, January 2022 to August 2024" title="Bar graph: Monthly Net Payroll Job Additions, January 2022 to August 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-unemployment-rate-january-2020-to-september-2024-line-graph-09-06-2024-1280w-720h.png?itok=2PoFgAPV" class="b-lazy" width="1200" height="675" alt="Line graph: Unemployment Rate, January 2020 to September 2024" title="Line graph: Unemployment Rate, January 2020 to September 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-federal-funds-rate-and-mortgage-rate-january-2019-to-january-2026-line-graph-09-06-2024-1280w-720h.png?itok=CfsCay51" class="b-lazy" width="1200" height="675" alt="Line graph: Federal Funds Rate and Mortgage Rate, January 2019 to January 2026" title="Line graph: Federal Funds Rate and Mortgage Rate, January 2019 to January 2026"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-total-payroll-jobs-in-arizona-january-2000-to-january-2024-line-graph-09-06-2024-1280w-720h.png?itok=goL3X_Wx" class="b-lazy" width="1200" height="675" alt="Line graph: Total Payroll Jobs in Arizona, January 2000 to January 2024" title="Line graph: Total Payroll Jobs in Arizona, January 2000 to January 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-payroll-jobs-in-michigan-january-2000-to-january-2024-line-graph-09-06-2024-1280w-720h.png?itok=2llLXWmZ" class="b-lazy" width="1200" height="675" alt="Line graph: Payroll Jobs in Michigan, January 2000 to January 2024" title="Line graph: Payroll Jobs in Michigan, January 2000 to January 2024">

The Home Mortgage Disclosure Act (HMDA) provides detailed information on mortgage lending activity, offering valuable insight into housing demand. Data on the number of loan applications can indicate whether housing demand is strong or weak, while approval rates reflect individuals' and families' ability to secure financing. Additional information, such as interest rates, income distribution, and property values, can paint a picture of the local economy. Let’s look at the most recent data from HMDA, which highlights changes in housing demand in U.S. metropolitan areas between 2022 and 2023. Nationwide, the number of home-purchase loan applications has declined from 7.9 million to 6.5 million. As a result, 3.5 million home-purchase loans were originated in 2023, compared to 4.4 million in 2022. The average interest rate on mortgages has increased from 4.96% in 2022 to 6.56% in 2023, while the median loan amount has decreased from $290,762 to $288,365, and the median property value has decreased from $354,953 to $353,957 respectively. Since all real estate is local, this analysis will focus on home-purchasing loans in 175 of the country's largest metropolitan areas. Loan Applications In December 2023, mortgage interest rates fell to their lowest level in six months, averaging 6.82%. Nevertheless, the combination of relatively high interest rates and elevated property values continued to price out many potential buyers from the market, resulting in fewer loan applications. The U.S. lost 1.3 million home-purchase loan applicants between 2022 and 2023, leading to over 900,000 fewer loan originations in 2023. The most notable change that year was a 37.36% decline in applications in Visalia-Porterville, CA, with 3,074 fewer applicants. Following Visalia-Porterville were Anchorage, AK (-35.99%), Oxnard-Thousand Oaks-Ventura, CA (-32.82%), and Urban Honolulu, HI (-31.46%). Conversely, the smallest change was 0.18% in Ocala, FL, losing 29 applications that year. Despite a 24.14% drop in applications, the New York-Newark-Jersey City, NY-NJ-PA still led with a total of 215,251 applications in 2023. Burlington, VT, had the fewest applications, with only 2,931 loan applicants. Mortgage Interest Rates In contrast to loan applications, mortgage rates rose in all 175 metropolitan areas, increasing from an average of 4.96% in 2022 to 6.56% in 2023. Iowa City, IA, which had the lowest rate of 4.35% in 2022, experienced the largest increase, climbing by 2.18 percentage points to 6.53% in 2023. However, most areas didn’t experience such significant rate changes. For instance, Flint, MI, had the highest mortgage rate, increasing by 1.49 percentage points from an average of 5.63% in 2022 to 7.12% in 2023. In 2023, the lowest mortgage rate was 5.72% in the San Francisco-Oakland-Hayward, CA area, and the smallest change was 1.07 percentage points in Lakeland-Winter Haven, FL.   Approval Rates NAR calculates the loan approval rate as the ratio between loans originated and the total number of applications in a metropolitan area. The national approval rate for home-purchasing loans was 55.1% in 2022 and 52.7% in 2023. The state of Wisconsin led in loan approvals, with two of its metropolitan areas having the highest approval rates for both 2022 and 2023: Green Bay, where 76.8% of the loans were approved in 2022, and Appleton, where 75.44% of the loans were approved in 2023. In comparison, the lowest approval rates were recorded in two metropolitan areas in Texas: McAllen-Edinburg-Mission, where only 44.43% of the applications were approved in 2022, and Beaumont-Port Arthur, where only 43.46% were approved in 2023. Between 2022 and 2023, only 27 metropolitan areas had an increase in the rate of approvals. The largest increase was 7.37 percentage points in Anchorage, AK, while the smallest was 0.08 percentage points in Washington-Arlington-Alexandria, DC-VA-MD-WV. Conversely, the largest decrease was -13.56 in San Francisco-Oakland-Hayward, CA, and the smallest was -0.06 points in Rochester, NY. The combination of rising mortgage rates and persistently increasing property values has been reducing affordability, making it difficult for many potential buyers, especially first-time home buyers, to enter the market in recent years. However, there is some optimism for the near future: If mortgage rates remain below 7%, we may see an increase in loan applications and approval rates in 2024. The Home Mortgage Disclosure Act (HMDA) provides detailed information on mortgage lending activity, offering valuable insight into housing demand. Data on the number of loan applications can indicate whether housing demand is strong or weak, while approval rates reflect individuals' and families' ability to secure financing. Additional information, such as interest rates, income distribution, and property values, can paint a picture of the local economy. Let’s look at the most recent data from HMDA, which highlights changes in housing demand in U.S. metropolitan areas between 2022 and 2023. Nationwide, the number of home-purchase loan applications has declined from 7.9 million to 6.5 million. As a result, 3.5 million home-purchase loans were originated in 2023, compared to 4.4 million in 2022. The average interest rate on mortgages has increased from 4.96% in 2022 to 6.56% in 2023, while the median loan amount has decreased from $290,762 to $288,365, and the median property value has decreased from $354,953 to $353,957 respectively. Since all real estate is local, this analysis will focus on home-purchasing loans in 175 of the country's largest metropolitan areas. Loan Applications In December 2023, mortgage interest rates fell to their lowest level in six months, averaging 6.82%. Nevertheless, the combination of relatively high interest rates and elevated property values continued to price out many potential buyers from the market, resulting in fewer loan applications. The U.S. lost 1.3 million home-purchase loan applicants between 2022 and 2023, leading to over 900,000 fewer loan originations in 2023. The most notable change that year was a 37.36% decline in applications in Visalia-Porterville, CA, with 3,074 fewer applicants. Following Visalia-Porterville were Anchorage, AK (-35.99%), Oxnard-Thousand Oaks-Ventura, CA (-32.82%), and Urban Honolulu, HI (-31.46%). Conversely, the smallest change was 0.18% in Ocala, FL, losing 29 applications that year. Despite a 24.14% drop in applications, the New York-Newark-Jersey City, NY-NJ-PA still led with a total of 215,251 applications in 2023. Burlington, VT, had the fewest applications, with only 2,931 loan applicants. Mortgage Interest Rates In contrast to loan applications, mortgage rates rose in all 175 metropolitan areas, increasing from an average of 4.96% in 2022 to 6.56% in 2023. Iowa City, IA, which had the lowest rate of 4.35% in 2022, experienced the largest increase, climbing by 2.18 percentage points to 6.53% in 2023. However, most areas didn’t experience such significant rate changes. For instance, Flint, MI, had the highest mortgage rate, increasing by 1.49 percentage points from an average of 5.63% in 2022 to 7.12% in 2023. In 2023, the lowest mortgage rate was 5.72% in the San Francisco-Oakland-Hayward, CA area, and the smallest change was 1.07 percentage points in Lakeland-Winter Haven, FL.   Approval Rates NAR calculates the loan approval rate as the ratio between loans originated and the total number of applications in a metropolitan area. The national approval rate for home-purchasing loans was 55.1% in 2022 and 52.7% in 2023. The state of Wisconsin led in loan approvals, with two of its metropolitan areas having the highest approval rates for both 2022 and 2023: Green Bay, where 76.8% of the loans were approved in 2022, and Appleton, where 75.44% of the loans were approved in 2023. In comparison, the lowest approval rates were recorded in two metropolitan areas in Texas: McAllen-Edinburg-Mission, where only 44.43% of the applications were approved in 2022, and Beaumont-Port Arthur, where only 43.46% were approved in 2023. Between 2022 and 2023, only 27 metropolitan areas had an increase in the rate of approvals. The largest increase was 7.37 percentage points in Anchorage, AK, while the smallest was 0.08 percentage points in Washington-Arlington-Alexandria, DC-VA-MD-WV. Conversely, the largest decrease was -13.56 in San Francisco-Oakland-Hayward, CA, and the smallest was -0.06 points in Rochester, NY. The combination of rising mortgage rates and persistently increasing property values has been reducing affordability, making it difficult for many potential buyers, especially first-time home buyers, to enter the market in recent years. However, there is some optimism for the near future: If mortgage rates remain below 7%, we may see an increase in loan applications and approval rates in 2024.

Facts: The average 30-year fixed mortgage rate from Freddie Mac remained unchanged at 6.35% this week from last week. At 6.35%, with 20% down, a monthly mortgage payment on a home with a price of $400,000 is $1,991. With 10% down, the typical payment would be $2,240. Positive: Although mortgage rates did not move, there was a slight increase in mortgage applications for purchase from the Mortgage Bankers Association. Some buyers are taking advantage of lower rates and more housing inventory. Negative: While mortgage rates are significantly lower than in recent months, anticipation of a Fed rate cut in two weeks may have buyers reticent to jump in so they can wait for even lower rates. However, as nearly everyone has forecasted a Fed Funds rate cut, it is unlikely to lower mortgage interest rates significantly.

" data-src="https://cdn.nar.realtor/sites/default/files/styles/wysiwyg_small2/public/2024-08-commercial-real-estate-market-insights-report-cover-08-29-2024-300w-433h.png?itok=KWg2tmuY" class="b-lazy" width="200" height="289" alt="Cover of the August 2024 Commercial Real Estate Market Insights report" title="Cover of the August 2024 Commercial Real Estate Market Insights report"> Download PDF With inflation and the labor market continuing to ease in July, the Federal Reserve's rate cuts aren't far off. Among all sectors in commercial real estate, the office sector, in particular, is eagerly awaiting these cuts. Office vacancy rates remained at a record high of 13.8% in July, underscoring the sector's ongoing challenges. Meanwhile, both retail and industrial fundaments softened further in July, with net absorption falling by 40% and 68% compared to a year ago in these two sectors, respectively. On the other hand, demand for apartments continued to surge as elevated mortgage rates hurt housing affordability. Below is a summary of how the major commercial real estate sectors have performed as we entered the second half of the year: Office Properties Office vacancy rate remained at record highs, with vacated office spaces still outpacing those being occupied. The outlook suggests that the vacancy rate will likely rise further with negative net absorption, which is expected to persist at least through the remainder of the year and the year after. Leasing activity, an indicator of demand and interest from potential tenants, has declined even more, now sitting 63 percentage points below the pre-pandemic average. But, on a positive note, the pace of additional vacancies has slowed down. The surplus of unoccupied office space has reduced from nearly 58 million square feet a year ago to 44 million square feet in July 2024. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/office-properties-net-absorption-in-square-feet-q1-2021-to-q3-2024-bar-graph-08-29-2024-842w-826h.png?itok=vYq1mcPZ" class="b-lazy" width="842" height="826" alt="Bar graph: Office properties net absorption in square feet, Q1 2021 to Q3 2024" title="Bar graph: Office properties net absorption in square feet, Q1 2021 to Q3 2024"> Multifamily Properties By contrast, the multifamily sector benefited from elevated mortgage rates in July. Net absorption was 90% higher than a year ago, sitting at 470,000 units. Another sign of strong demand in the sector is that landlords are offering fewer discounts on their initial asking rents compared to the pre-pandemic average. However, despite this robust demand for rental units, elevated completions and units under construction have kept the multifamily vacancy rate near 8% and rent growth at around year-over-year. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/multifamily-properties-top-10-areas-with-strongest-12-month-absorption-2024-q3-and-2023-q3-table-08-29-2024-862w-1036h.png?itok=8DbAWWuG" class="b-lazy" width="862" height="1036" alt="Table: Multifamily Properties: Top 10 Areas with Strongest 12-month Absorption, 2024 Q3 and 2023 Q3" title="Table: Multifamily Properties: Top 10 Areas with Strongest 12-month Absorption, 2024 Q3 and 2023 Q3"> Retail Properties Availability conditions in the retail sector remained tight in July. Since the end of last year, only 4.7% of retail space is available for lease, the lowest level on record. This limited availability of retail spaces is the primary reason why the retail vacancy rate has stayed near 4% since the end of 2022, despite the slowdown in demand for retail spaces. Specifically, retail net absorption is down by 40 percentage points compared to a year earlier. With fewer retail spaces under construction, the fundamentals of this sector are expected to remain tight for the rest of the year. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/retail-properties-12-month-net-absorption-by-type-2014-to-2024-line-graph-08-29-2024-1300w-580h.png?itok=uCNp7jFu" class="b-lazy" width="1200" height="535" alt="Line graph: Retail properties net absorption by type, 2014 to 2024" title="Line graph: Retail properties net absorption by type, 2014 to 2024"> Industrial Properties The industrial sector continued to lose momentum in July. Net absorption was nearly 70 percentage points lower than a year ago, while rent growth decelerated significantly, dropping to 3.6% from 8.1%. The vacancy rate also rose to over 6.5% from 5.1%. With inventory levels at record highs, the outlook suggests further softening in this sector for the remainder of the year. However, easing inflation in the coming months may boost demand for goods. This usually creates a ripple effect, increasing the need for industrial spaces to manage production, storage, and distribution. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/industrial-properties-top-10-areas-with-the-strongest-12-month-absorption-q3-2024-and-q3-2023-table-08-29-2024-840w-1018h.png?itok=MT2qfj69" class="b-lazy" width="840" height="1018" alt="Table: Industrial properties top 10 areas with the strongest 12-month absorbtion, Q3 2024 and Q3 2023" title="Table: Industrial properties top 10 areas with the strongest 12-month absorbtion, Q3 2024 and Q3 2023"> Hotel Properties As we start Q3 2024, the hospitality sector is maintaining stability. Hotel occupancy rates have leveled off at around 63%, remaining roughly 3% below pre- pandemic figures, which suggests that a complete recovery may be elusive due to the prevalence of remote work. Nevertheless, average daily rates and revenue per available room have now exceeded pre-pandemic benchmarks. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/hotel-properties-12-month-occupancy-rate-in-july-2019-to-2024-bar-graph-08-29-2024-820w-470h.png?itok=vpo588dQ" class="b-lazy" width="820" height="470" alt="Bar graph: Hotel properties 12-month occupancy rate in July 2019 to 2024" title="Bar graph: Hotel properties 12-month occupancy rate in July 2019 to 2024"> Download the full report

Facts: The average 30-year fixed mortgage rate from Freddie Mac dropped to 6.35% this week from 6.46% last week. At 6.35%, with 20% down, a monthly mortgage payment on a home with a price of $400,000 is $1,991. With 10% down, the typical payment would be $2,240. Positive: This is the lowest that mortgage interest rates have dropped in the past 15 months. This changes housing affordability for home buyers. For buyers who sought a mortgage at the recent high of 7.79% in October 2023, the payment would be $2,301. At 6.35%, this is a payment difference of $310 monthly or $3,720 a year.  Negative: The question is: When are mortgage rates low enough for current homeowners to make a move? While the current rate helps first-time buyers, it might be a big shrug for repeat buyers, as they are locked into ultra-low-rate mortgages that we will not see again.

Key Highlights Pending home sales fell 5.5% in July. Month over month, contract signings declined in all four U.S. regions. Compared to one year ago, pending home sales increased in the Northeast but decreased in the Midwest, South and West.   WASHINGTON (August 29, 2024) – Pending home sales in July retreated 5.5%, according to the National Association of REALTORS®. All four U.S. regions posted monthly losses in transactions. Year-over-year, the Northeast rose while the Midwest, South and West registered declines. The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – slipped to 70.2 in July, the lowest reading since the index began tracking in 2001. Year over year, pending transactions were down 8.5%. An index of 100 is equal to the level of contract activity in 2001. "A sales recovery did not occur in midsummer," said NAR Chief Economist Lawrence Yun. "The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election." Pending Home Sales Regional Breakdown The Northeast PHSI waned 1.4% from last month to 64.6, an increase of 2.4% from July 2023. The Midwest index reduced 7.8% to 67.8 in July, down 11.4% from one year ago. The South PHSI sank 6.5% to 83.5 in July, falling 11.5% from the prior year. The West index shrunk 3.8% in July to 56.2, down 6.0% from July 2023. "In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months," added Yun. "Current lower, falling mortgage rates will no doubt bring buyers into market." About the National Association of REALTORS® The National Association of REALTORS® is America's largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics. # # # *The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues. The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population. NOTE: Existing-Home Sales for August will be released September 19. The next Pending Home Sales Index will be released September 26. All release times are 10 a.m. Eastern. View the NAR Statistical News Release Schedule.

Housing affordability has long been a critical issue in the housing market, affecting individuals, families, and entire communities. While the challenges associated with affording a home are not new, they have remained one of the main concerns in the housing market, particularly as higher mortgage rates have exacerbated the situation. The widening gap between income levels and housing costs makes homeownership increasingly out of reach for many. However, with mortgage rates recently falling below 6.5%, there has been an improvement in housing affordability. Rates below 6.5% make it possible for American families to afford to purchase a median-priced home. This article delves into the trends in housing affordability and examines how the number of households who can afford to buy a home has changed over the years. Housing affordability has often been associated with broader economic cycles and demographic trends. For instance, in the late ’70s, the economy was struggling significantly. Inflation surged to 14%, driving up consumer prices and home prices. When mortgage rates reached 17% in 1981, many people could no longer afford the higher mortgage payment, slowing down demand for housing. Does this ring a bell? Starting in 2022, the Federal Reserve raised its interest rates a total of 11 times to combat elevated inflation. As a result, mortgage rates have reached 7% on average in 2023, driving home buying out of reach for many people. While there are various ways to track affordability, the National Association of REALTORS® monitors monthly housing affordability trends using the Housing Affordability Index (HAI) and the payment-to-income ratio. These two measures are critical tools used to gauge the accessibility of homeownership for average households. Specifically, they provide insight into whether the typical family can afford to buy a home and maintain mortgage payments relative to their income. HAI definition and trends The Housing Affordability Index is a measure that reflects the relationship between median home prices, median family income, and mortgage rates. It is calculated by comparing the income needed to qualify for a mortgage on a median-priced home to the actual median family income. An index value of 100 indicates that a family earning the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20% down payment. Values above 100 suggest housing is more affordable, while values below 100 indicate it is less affordable. Looking back at the entire historical data since 1989, housing affordability hit a record low in 2023, with an index of 98.2, indicating that the American family earns less than the income needed to purchase the median-priced home. Historically, however, the typical family generally earned about 40% more than the qualifying income, meaning they could afford a home costing 40% more than the median price. In 2012, as both mortgage rates and home prices dropped in the aftermath of the housing downturn, Americans could afford homes priced nearly twice the median price. Affordability has improved since the end of the first half of 2024, with mortgage rates recently falling below 6.5%. While the Federal Reserve is anticipated to begin cutting rates as early as September, the downward trend in mortgage rates will continue. Rates below 6.5% bring the American family back to the market, as, at these rates, they can afford to buy a median-priced home without spending more than 25% of their income on mortgage payments. The HAI is even lower for first-time buyers, reflecting the increased challenges they face in their journey to purchase their first home. Given that the income of first-time buyers is generally lower1 than that of all buyers, first-time buyers earn just 63% of the income needed to qualify for the purchase of a starter2 home. As of the year's second quarter, first-time buyers can afford to buy a home priced 38% less than the median starter home. Payment-to-income ratio definition and trends The payment-to-income ratio is another key metric the National Association of REALTORS® uses to assess housing affordability. Specifically, this ratio represents the percentage of the typical family’s gross income spent on mortgage payments (including principal and interest). While the rule of thumb indicates that housing costs shouldn’t exceed 30% of the income, NAR assumes that the payment-to-income ratio should not exceed 25%. Thus, a lower ratio suggests housing is more affordable, as a smaller portion of income is attributed to housing costs. Respectively, a higher ratio indicates that a larger share of income is required to cover the monthly mortgage payment. However, if the ratio rises above 25%, the typical family is considered “cost-burdened.” Over the years, the payment-to-income ratio has averaged 18.5%, indicating that historically, the typical family spent about 18.5% of their income on mortgage payments. However, mirroring the trend seen in the HAI, the payment-to-income ratio reached its highest level in 2023 at 25.4%. This exceeds the 25% threshold, showing that the typical family is now considered cost-burdened when purchasing the median-priced home. By contrast, in 2012, the ratio was just 12.7%, marking the lowest level ever recorded. First-time buyers must allocate a substantially larger share of their income to the monthly mortgage payment. As of the second quarter of the year, the payment-to-income ratio for first-time buyers was 40.0%. How many households can afford to buy a home now versus in 2021 and 2019 Based on the two metrics discussed, the pool of people who can afford a home has shrunk considerably compared to previous years. Households that once could comfortably afford a median-priced home are now finding it increasingly difficult, as they must allocate a larger portion of their income to mortgage payments.   Currently, one in three households (33%) can afford to purchase a median-priced home without spending more than 25% of their income on their mortgage payment. By contrast, in 2021, when mortgage rates were around 3%, 55% of households met the income requirements. In 2019, before the pandemic, housing was even more affordable, with nearly 60% of households able to purchase a home. That means that since 2021, 28.4 million households have been priced out of the market, and 30.4 million households can no longer afford a median-priced home since 2019. Only 17% of potential first-time buyers—i.e., current renters—can afford to buy the median-priced starter home. In 2021, 37% of renter households earned the qualifying income, and in 2019, 42% of renters were able to transition to homeownership. As a result, 8.7 million renter households have been priced out since 2021 and 10.6 million since 2019. This weakening affordability in recent years has far-reaching implications for individuals and families. Homeownership has historically been proven to be one of the primary ways of building wealth as home values appreciate over time. In the last decade, homeowners built over $200,000 in wealth from price appreciation. When people are priced out of the housing market, especially first-time buyers, they miss out on this opportunity to accumulate wealth. Instead of building wealth, they spend a substantial amount of their income on rent, which doesn’t contribute to asset accumulation. 1 The income of first-time buyers is assumed to be 65% of the median family income. 2 The value of a starter home is 15% below the median price of a single-family home. Housing affordability has long been a critical issue in the housing market, affecting individuals, families, and entire communities. While the challenges associated with affording a home are not new, they have remained one of the main concerns in the housing market, particularly as higher mortgage rates have exacerbated the situation. The widening gap between income levels and housing costs makes homeownership increasingly out of reach for many. However, with mortgage rates recently falling below 6.5%, there has been an improvement in housing affordability. Rates below 6.5% make it possible for American families to afford to purchase a median-priced home. This article delves into the trends in housing affordability and examines how the number of households who can afford to buy a home has changed over the years. Housing affordability has often been associated with broader economic cycles and demographic trends. For instance, in the late ’70s, the economy was struggling significantly. Inflation surged to 14%, driving up consumer prices and home prices. When mortgage rates reached 17% in 1981, many people could no longer afford the higher mortgage payment, slowing down demand for housing. Does this ring a bell? Starting in 2022, the Federal Reserve raised its interest rates a total of 11 times to combat elevated inflation. As a result, mortgage rates have reached 7% on average in 2023, driving home buying out of reach for many people. While there are various ways to track affordability, the National Association of REALTORS® monitors monthly housing affordability trends using the Housing Affordability Index (HAI) and the payment-to-income ratio. These two measures are critical tools used to gauge the accessibility of homeownership for average households. Specifically, they provide insight into whether the typical family can afford to buy a home and maintain mortgage payments relative to their income. HAI definition and trends The Housing Affordability Index is a measure that reflects the relationship between median home prices, median family income, and mortgage rates. It is calculated by comparing the income needed to qualify for a mortgage on a median-priced home to the actual median family income. An index value of 100 indicates that a family earning the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20% down payment. Values above 100 suggest housing is more affordable, while values below 100 indicate it is less affordable. Looking back at the entire historical data since 1989, housing affordability hit a record low in 2023, with an index of 98.2, indicating that the American family earns less than the income needed to purchase the median-priced home. Historically, however, the typical family generally earned about 40% more than the qualifying income, meaning they could afford a home costing 40% more than the median price. In 2012, as both mortgage rates and home prices dropped in the aftermath of the housing downturn, Americans could afford homes priced nearly twice the median price. Affordability has improved since the end of the first half of 2024, with mortgage rates recently falling below 6.5%. While the Federal Reserve is anticipated to begin cutting rates as early as September, the downward trend in mortgage rates will continue. Rates below 6.5% bring the American family back to the market, as, at these rates, they can afford to buy a median-priced home without spending more than 25% of their income on mortgage payments. The HAI is even lower for first-time buyers, reflecting the increased challenges they face in their journey to purchase their first home. Given that the income of first-time buyers is generally lower1 than that of all buyers, first-time buyers earn just 63% of the income needed to qualify for the purchase of a starter2 home. As of the year's second quarter, first-time buyers can afford to buy a home priced 38% less than the median starter home. Payment-to-income ratio definition and trends The payment-to-income ratio is another key metric the National Association of REALTORS® uses to assess housing affordability. Specifically, this ratio represents the percentage of the typical family’s gross income spent on mortgage payments (including principal and interest). While the rule of thumb indicates that housing costs shouldn’t exceed 30% of the income, NAR assumes that the payment-to-income ratio should not exceed 25%. Thus, a lower ratio suggests housing is more affordable, as a smaller portion of income is attributed to housing costs. Respectively, a higher ratio indicates that a larger share of income is required to cover the monthly mortgage payment. However, if the ratio rises above 25%, the typical family is considered “cost-burdened.” Over the years, the payment-to-income ratio has averaged 18.5%, indicating that historically, the typical family spent about 18.5% of their income on mortgage payments. However, mirroring the trend seen in the HAI, the payment-to-income ratio reached its highest level in 2023 at 25.4%. This exceeds the 25% threshold, showing that the typical family is now considered cost-burdened when purchasing the median-priced home. By contrast, in 2012, the ratio was just 12.7%, marking the lowest level ever recorded. First-time buyers must allocate a substantially larger share of their income to the monthly mortgage payment. As of the second quarter of the year, the payment-to-income ratio for first-time buyers was 40.0%. How many households can afford to buy a home now versus in 2021 and 2019 Based on the two metrics discussed, the pool of people who can afford a home has shrunk considerably compared to previous years. Households that once could comfortably afford a median-priced home are now finding it increasingly difficult, as they must allocate a larger portion of their income to mortgage payments.   Currently, one in three households (33%) can afford to purchase a median-priced home without spending more than 25% of their income on their mortgage payment. By contrast, in 2021, when mortgage rates were around 3%, 55% of households met the income requirements. In 2019, before the pandemic, housing was even more affordable, with nearly 60% of households able to purchase a home. That means that since 2021, 28.4 million households have been priced out of the market, and 30.4 million households can no longer afford a median-priced home since 2019. Only 17% of potential first-time buyers—i.e., current renters—can afford to buy the median-priced starter home. In 2021, 37% of renter households earned the qualifying income, and in 2019, 42% of renters were able to transition to homeownership. As a result, 8.7 million renter households have been priced out since 2021 and 10.6 million since 2019. This weakening affordability in recent years has far-reaching implications for individuals and families. Homeownership has historically been proven to be one of the primary ways of building wealth as home values appreciate over time. In the last decade, homeowners built over $200,000 in wealth from price appreciation. When people are priced out of the housing market, especially first-time buyers, they miss out on this opportunity to accumulate wealth. Instead of building wealth, they spend a substantial amount of their income on rent, which doesn’t contribute to asset accumulation. 1 The income of first-time buyers is assumed to be 65% of the median family income. 2 The value of a starter home is 15% below the median price of a single-family home.

" data-src="https://cdn.nar.realtor/sites/default/files/styles/wysiwyg_small2/public/2024-07-foot-traffic-sentrilock-home-showings-report-cover-08-22-2024-300w-400h.png?itok=mCOyAq4p" class="b-lazy" width="200" height="267" alt="Cover of the July 2024 Foot Traffic NAR Sentrilock Home Showings report" title="Cover of the July 2024 Foot Traffic NAR Sentrilock Home Showings report"> Download PDF Home Showings in the U.S. in July 2024 Showings up 1% Y/Y in July July 2024 U.S. showings were up 1% year-over-year, with 754,338 showings, according to data from SentriLock, LLC., a lockbox company. The pace of showing activity has declined compared to last month, June 2024. SentriLock Cards Inclined 1% Y/Y Total U.S. SentriLock cards rose1% year-over-year to 231,839. SentriLock cards, comprised of SentriKey® and SentriCard®,allow REALTORS® to access the Sentrilock® lockbox and indicate the number of REALTORS® who conduct the showing. Showings Per Card Showed No Gain 0% Y/Y The number of showings per card reflects the strength of buyer interest per listed property. At a national level, showings per card were flat at 0% year over year in July. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/2024-07-foot-traffic-us-year-over-year-change-in-showings-january-2009-to-july-2024-line-graph-08-22-2024-946w-942h.png?itok=H70eChLN" class="b-lazy" width="946" height="492" alt="Line graph: U.S. Year-Over-Year Change in Home Showings, January 2009 to July 2024" title="Line graph: U.S. Year-Over-Year Change in Home Showings, January 2009 to July 2024"> Regional Home Showings in July 2024 Two of the four Regions Saw Y/Y Showings Increase Two of the four regions saw an increase in showings year-over-year in July: The Northeast had the biggest gain (28%), followed by the South (7%). The Midwest had the biggest decline (-5%) followed by the West with the smallest drop (-2%). Y/Y SentriLock Cards Decreased In Two of the four Regions Cards were up in the South (8%) and the Northeast (6%) on a year-over-year basis. The West fell (-4 %), followed by the Midwest (-3 % ), which had the smallest decline. Showings Per Card Increased In Two of the Four Regions On A Y/Y Basis Two of the four regions saw a year-over-year increase in showings per card in July. The Northeast had the biggest incline (21%), followed by the West (2%). The Midwest fell by (-2%) followed by the South region which declined (-1%). " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/2024-07-foot-traffic-regional-year-over-year-change-in-showings-us-map-08-22-2024-914w-580h.png?itok=pAYtXep2" class="b-lazy" width="914" height="580" alt="U.S. Map: Regional Year-Over-Year Change in Home Showings in July 2024" title="U.S. Map: Regional Year-Over-Year Change in Home Showings in July 2024"> Download the full report

Key Highlights Existing-home sales grew 1.3% in July to a seasonally adjusted annual rate of 3.95 million, stopping a four-month sales decline that began in March. However, sales slipped 2.5% from one year ago. The median existing-home sales price elevated 4.2% from July 2023 to $422,600, the 13th consecutive month of year-over-year price gains. The inventory of unsold existing homes edged higher by 0.8% from the prior month to 1.33 million at the end of July, or the equivalent of 4.0 months' supply at the current monthly sales pace. " data-src="https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/downloadable/2024-07-existing-home-sales-housing-snapshot-infographic-08-22-2024-1000w-1500h.png?itok=o3LVPe6L" class="b-lazy" width="1000" height="1501" alt="EHS Housing Snapshot Infographic, July 2024" title="EHS Housing Snapshot Infographic, July 2024"> See and share this infographic. WASHINGTON (August 22, 2024) – Existing-home sales improved in July, breaking a streak of four consecutive monthly declines, according to the National Association of REALTORS®. Three out of four major U.S. regions registered sales increases while the Midwest remained steady. Year-over-year, sales rose in the Northeast and West but retreated in the Midwest and South. Total existing-home sales1 – completed transactions that include single-family homes, townhomes, condominiums and co-ops – ascended 1.3% from June to a seasonally adjusted annual rate of 3.95 million in July. Year-over-year, sales fell 2.5% (down from 4.05 million in July 2023). "Despite the modest gain, home sales are still sluggish," said NAR Chief Economist Lawrence Yun. "But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates." Total housing inventory2 registered at the end of July was 1.33 million units, up 0.8% from June and 19.8% from one year ago (1.11 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from 4.1 months in June but up from 3.3 months in July 2023. The median existing-home price3 for all housing types in July was $422,600, up 4.2% from one year ago ($405,600). All four U.S. regions posted price increases. REALTORS® Confidence Index According to the monthly REALTORS® Confidence Index, properties typically remained on the market for 24 days in July, up from 22 days in June and 20 days in July 2023. First-time buyers were responsible for 29% of sales in July, identical to June but down from 30% in July 2023. NAR's 2023 Profile of Home Buyers and Sellers – released in November 20234 – found that the annual share of first-time buyers was 32%. All-cash sales accounted for 27% of transactions in July, down from 28% in June but up from 26% one year ago. Individual investors or second-home buyers, who make up many cash sales, purchased 13% of homes in July, down from 16% in both June 2024 and July 2023. Distressed sales5 – foreclosures and short sales – represented 1% of sales in July, virtually unchanged from last month and the prior year. Mortgage Rates According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.49% as of August 15. That's up from 6.47% one week ago but down from 7.09% one year ago. Single-family and Condo/Co-op Sales Single-family home sales grew 1.4% to a seasonally adjusted annual rate of 3.57 million in July, down 1.4% from the previous year. The median existing single-family home price was $428,500 in July, up 4.2% from July 2023. Existing condominium and co-op sales in July were identical to June at a seasonally adjusted annual rate of 380,000 units, down 11.6% from one year ago (430,000 units). The median existing condo price was $367,500 in July, up 2.7% from the prior year ($357,900). "The median home price of condominiums is cheaper, yet the condominium market is underperforming compared to the single-family market," Yun added. "Rising maintenance and insurance costs have lessened the appeal for condominiums." Regional Breakdown Existing-home sales in the Northeast in July climbed 4.3% from June to an annual rate of 490,000, an increase of 2.1% from July 2023. The median price in the Northeast was $505,100, up 8.3% from last year. In the Midwest, existing-home sales were unchanged in July at an annual rate of 920,000, down 5.2% from the previous year. The median price in the Midwest was $321,300, up 4.5% from July 2023. Existing-home sales in the South increased 1.1% from June to an annual rate of 1.79 million in July, down 3.8% from one year before. The median price in the South was $372,500, up 2.3% from one year earlier. In the West, existing-home sales rose 1.4% in July to an annual rate of 750,000, also up 1.4% from a year ago. The median price in the West was $629,500, up 3.4% from July 2023. About the National Association of REALTORS® The National Association of REALTORS® is America's largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics. # # # For local information, please contact the local association of REALTORS® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology. NOTE: NAR's Pending Home Sales Index for July is scheduled for release on August 29, and Existing-Home Sales for August will be released on September 19. Release times are 10 a.m. Eastern. 1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs. Existing-home sales, based on closings, differ from the U.S. Census Bureau's series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions. The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns. Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos. 2 Total inventory and month's supply data are available back through 1999, while single-family inventory and month's supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis). 3 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received. The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR's quarterly metro area price reports. 4 Survey results represent owner-occupants and differ from separately reported monthly findings from NAR's REALTORS® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes. 5 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR's REALTORS® Confidence Index, posted at nar.realtor.

No one likes jumping on a social media bandwagon more than NAR Research. So, by way of a recent meme, let's go! Looking at the data, let's focus on first-time buyers. First-time buyers have to be "demure and mindful" in many ways. Finances Housing affordability is a struggle, with current high home prices and elevated mortgage interest rates. In nearly half of metro areas, home buyers need a family income of at least $100,000 to purchase a home with a 10% down payment. Since first-time buyers do not have housing equity to rely on, they are making financial sacrifices to enter homeownership. First-time buyers today are older, with a median age of 35 and a household income of nearly $25,000 more than the past year. They have had time to be demure and mindful of their home purchase. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-first-time-buyer-sacrifices-bar-graph-08-21-2024-1300w-762h.png?itok=cWQmS-df" class="b-lazy" width="1200" height="703" alt="Bar graph: First-Time Buyer Sacrifices" title="Bar graph: First-Time Buyer Sacrifices"> Prior living situation First-time buyers may also be demure and mindful before even entering homeownership. Nearly one-quarter of first-time buyers purchased their home after moving directly from a family or friend's home. Living at a family home to save for a down payment epitomizes being demure and mindful of one's finances. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-prior-living-arrangement-of-recent-first-time-buyers-1989-to-2023-stacked-bar-graph-08-21-2024-1300w-969h.png?itok=BjojpvwU" class="b-lazy" width="1200" height="894" alt="Stacked bar graph: Prior Living Arrangement of Recent First-Time Buyers, 1989 to 2023" title="Stacked bar graph: Prior Living Arrangement of Recent First-Time Buyers, 1989 to 2023"> Buyer offers While more inventory is trickling into the housing market, there is still limited inventory. First-time buyers have to be patient when there are multiple offers. The typical seller receives more than one offer, and the typical home sells in under a month, which indicates a fast-paced housing market. First-time buyers typically have a smaller down payment and less room to negotiate on home price. They must be demure and mindful that they may have to place offers on more than one home before a contract is accepted. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-median-down-payment-among-buyers-1989-to-2023-line-graph-08-21-2024-1300w-726h.png?itok=JG4QhYUQ" class="b-lazy" width="1200" height="670" alt="Line graph: Median Down Payment Among Buyers, 1989 to 2023" title="Line graph: Median Down Payment Among Buyers, 1989 to 2023"> Working with a real estate agent Eighty-nine percent of home buyers use a real estate agent or broker to purchase their home. Buyers want a real estate agent or broker who is not only able to help them find the right home but is going to help them negotiate and to help them explain and understand the real estate market. These factors are especially true for first-time home buyers. This is the biggest financial purchase of one's life, and real estate agents are helping buyers achieve the American dream. Certainly, one can consider helping a home buyer achieve part of the American dream as being demure and mindful. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-buyer-use-agents-1981-to-2023-line-graph-08-21-2024-1300w-704h.png?itok=bflvvInX" class="b-lazy" width="1200" height="650" alt="Line graph: Buyers' Use of Agents, 1981 to 2023" title="Line graph: Buyers' Use of Agents, 1981 to 2023">

This past March, celebrating Women’s History Month, we published a blog post exploring the triumphs and challenges of female homeownership. Women of color often face systemic barriers, like limited access to good education, job opportunities, and affordable housing, that are rooted in both historical and ongoing racial discrimination. In another blog post, we looked more closely at who buys homes, the sociodemographic factors that influence home buying, and the ages at which single female home buyers enter the market. Following up on our two previous posts, using data from the 2023 Profile of Home Buyers and Sellers, we will examine the different ways single female home buyers approach buying a home and the challenges they face. In this blog post, we’ll discuss their diverse financial strategies and the significant hurdles they encounter, like dealing with debt, student loans, and mortgage application denials. Financing Source of Down Payment " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/slide1_0.png?itok=6RsajYdL" class="b-lazy" width="1200" height="367" alt="Sources of downpayment"> Forty-six percent of recent single female home buyers used their savings to finance their home purchases, highlighting the importance of personal savings in home buying for this demographic. The use of savings is particularly pronounced among Asian/Pacific Islander (68%) and Hispanic/Latina (63%) single female home buyers, who significantly surpass the average. In contrast, white single female home buyers were more likely to report they utilized proceeds from the sale of a primary residence than any other racial/ethnic group at 45%. This suggests that single white female buyers are more likely to have owned their previous residence and experience the associated financial benefits. Asian/Pacific Islander (24%) and Hispanic/Latina (17%) single female home buyers were more likely to report using a gift from a relative or friend, indicating the significance of familial and social support in the homebuying process. This disparity highlights the varying financial dynamics and community support systems across different racial and ethnic groups in the context of home buying. Debt " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/slide2_0.png?itok=zEYt1yY7" class="b-lazy" width="1200" height="429" alt="Share saving for downpayment was most difficult task in buying process"> The percentage of single female homebuyers who found saving for a down payment to be the most difficult task varies significantly across racial and ethnic groups. Asian/Pacific Islander single female buyers reported the highest difficulty (32%), followed by Hispanic/Latina (28%) and Black/African American single female buyers (22%). White single female buyers (12%) reported the lowest difficulty saving. Data from the 2023 Profile of Home Buyer and Sellers Report found that current rent and mortgage payments, student loans, and credit card debt were the primary debts delaying savings for single female home buyers. The impact was particularly pronounced among Asian/Pacific Islander single female buyers (54%). White single female buyers reported the least impact from rent and mortgage payments (29%). Credit card debt affected saving efforts across all groups but varied in significance. Hispanic/Latina single female buyers (17%) and White single female buyers (19%) reported the lowest impact from credit card debt. The data indicates that saving for a down payment is particularly challenging for certain racial and ethnic groups of single female homebuyers, with housing costs and student loans being significant barriers. Student Loan Debt Student loans significantly impact many single female homebuyers. Hispanic/Latina buyers (33%) report the highest impact, while Asian/Pacific Islander buyers (13%) report the lowest. The median student loan debt for single female homebuyers is $35,000. White homebuyers have the lowest median debt at $25,000, while Hispanic/Latina homebuyers have the highest at $65,400, more than 2.5 times higher. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/slide3_0.png?itok=KVcUiw48" class="b-lazy" width="1200" height="208" alt="Median amount of student debt"> Mortgage Challenges/Accessibility Six percent of single female home buyers reported having a mortgage application denied, underscoring the challenges faced by this demographic in securing home financing. Notably, Black single female buyers were more likely to experience a denied mortgage application than any other racial or ethnic group, with 12% reporting such rejections. The top three reasons for mortgage application rejections among single female buyers were debt-to-income ratio, low credit score, and insufficient reserve money. Among these factors, a single woman's debt-to-income ratio was the most frequently reported reason for rejection across all racial and ethnic groups. Single Black women, in particular, reported this issue at an alarmingly high rate of 67%, which is significantly higher than the rates reported by other groups. Overall, these statistics reveal significant racial and ethnic disparities in the homebuying process for single female buyers, pointing to the need for targeted interventions, policies, and programs to address these inequities and support more equitable access to homeownership. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/slide4_0.png?itok=YUowcxwp" class="b-lazy" width="1200" height="493" alt="Buyer reasons why rejected by mortgage lender"> Views on Homes as a Financial Investment " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/slide5.png?itok=-LnBQNL6" class="b-lazy" width="1200" height="689" alt="Single female buyers' view of homes as a good financial investment"> Nearly 8 in 10 single female home buyers consider buying a home a good financial investment. Hispanic/Latina single female buyers view homeownership as a good investment at the highest rate (86%), followed by Black/African American single female buyers (81%). Personal savings are very important, but how much people rely on family support and previous home equity can differ greatly between groups. The struggle to save for a down payment, handle debt, and deal with mortgage rejections shows why we need solutions that fit different needs. Generational wealth can also play a huge role, affecting how easily people can get into homeownership. Since many buyers see owning a home as a smart investment, tackling these financial challenges and gaps is key to making homeownership fairer and more accessible for everyone.

Facts: The 30-year fixed mortgage rate from Freddie Mac remained essentially flat at 6.49% this week compared to 6.47% last week. At 6.49%, with 20% down, a monthly mortgage payment on a home with a price of $400,000 is $2,021. With 10% down, the typical payment would be $2,273. Positive: Despite weekly volatility, mortgage rates remain at .5% below the average over the last year. Mortgage applications showed a 19-month high. CPI showed inflation has been tamed. The Federal Reserve will cut the Fed Funds rate. For home buyers looking for lower rates than that of the past year—they are lower. Negative: Mortgage interest rates may still not be low enough for homeowners with golden handcuffs who have a mortgage under 4% to make a move—unless there is a compelling reason like a family or job change. While the Fed Funds rate cut is expected, mortgage interest rates should stay in the 6 percent range.

The real estate world is always evolving, and the National Association of REALTORS® (NAR) members are right in the middle of it. This year's 2024 Member Profile has some intriguing findings, especially about the diversity among newer members. One notable highlight is that new members are more diverse than their experienced counterparts. Among those with two years or less of experience, 40% are non-White. This marks a significant shift in who's entering the real estate field and highlights the fresh perspectives these new agents bring. In this post, we'll examine how these new, diverse REALTORS® compare to their more experienced colleagues. We'll explore what these differences mean for the industry's future and dive deeper into the question: Who are REALTORS®? Here's a chart from chapter six of this year's Member Profile that showcases the racial and ethnic diversity of our newest members. Among those with two years or less of experience, 40% are non-White, which is more than double the 16% of those with 16 or more years of experience. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-racial-and-ethnic-distribution-of-realtors-by-real-estate-experience-table-08-14-2024-636w-300h.png?itok=BGU_W3Wz" class="b-lazy" width="636" height="300" alt="Table: Racial and Ethnic Distribution of REALTORS® by Real Estate Experience" title="Table: Racial and Ethnic Distribution of REALTORS® by Real Estate Experience"> The report noted that the median years of experience is 11 years and that the typical REALTOR® is a 55-year-old white female. Comparing the gender and racial/ethnic composition of our newest members to those with median years of experience reveals some interesting insights. The chart shows the gender and racial/ethnic composition of REALTORS® with two years or less experience, offering an interesting look at the diversity within the profession. Overall, most REALTORS® with two years or less experience are female (65%), while 33% are male. However, when compared to other levels of experience, there seems to be more of a gender balance, especially among Black/African American, Asian, and American Indian/Eskimo/Aleut REALTORS®. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-gender-and-racial-ethnic-composition-of-realtors-with-2-years-or-less-experience-table-08-14-2024-652w-288h.png?itok=_UlmvKjo" class="b-lazy" width="652" height="288" alt="Table: Gender and Racial/Ethnic Composition of REALTORS® With 2 Years or Less Experience" title="Table: Gender and Racial/Ethnic Composition of REALTORS® With 2 Years or Less Experience"> The majority of REALTORS® with 6 to 15 years of experience are female (70%), while 27% are male. The distribution varies across different racial and ethnic groups, with the highest percentage of females among Asian REALTORS® (81%) and Black REALTORS® (73%) and the lowest among Hispanic/Latino REALTORS® (63%). " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-gender-and-racial-ethnic-composition-of-realtors-with-6-to-15-years-experience-table-08-14-2024-652w-272h.png?itok=-oaUVxC2" class="b-lazy" width="652" height="272" alt="Table: Gender and Racial/Ethnic Composition of REALTORS® With 6 to 15 Years Experience" title="Table: Gender and Racial/Ethnic Composition of REALTORS® With 6 to 15 Years Experience"> There is a 10-year median age difference between our newest members and those with 6 to 15 years of experience. The median age of the newest members is 42, whereas the median age of REALTORS® with 6 to 15 years of experience is 52. Real estate was not their first career in both cases, which explains the higher median ages. Interestingly, 11% of those with 16 or more years of experience say that real estate was their first career. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-age-of-realtors-by-real-estate-experience-table-08-14-2024-1300w-606h.png?itok=uk68KmVq" class="b-lazy" width="1200" height="559" alt="Table: Age of REALTORS® by Real Estate Experience" title="Table: Age of REALTORS® by Real Estate Experience"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-prior-full-time-careers-of-realtors-by-real-estate-experience-table-08-14-2024-644w-164h.png?itok=qK_oywl-" class="b-lazy" width="644" height="164" alt="Table: Prior Full-time Careers of REALTORS® by Real Estate Experience" title="Table: Prior Full-time Careers of REALTORS® by Real Estate Experience"> Another way new members stand out compared to more experienced members is in their language fluency. Those with two years or less of experience are more likely to be fluent in other languages than more experienced members, with over a quarter being fluent in more than one language. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-language-fluency-of-realtors-by-real-estate-experience-table-08-14-2024-642w-160h.png?itok=Y2wVCVHp" class="b-lazy" width="642" height="160" alt="Table: Language Fluency of REALTORS® by Real Estate Experience" title="Table: Language Fluency of REALTORS® by Real Estate Experience"> These insights from the 2024 Member Profile paint a picture of a dynamic and diverse group of new REALTORS® who bring fresh perspectives and skills to the industry. It will be exciting to see how this diversity will shape the future of real estate!

Inflation is calmer, thereby setting the Fed Reserve up to start the rate-cutting process in September. Consumer prices rose by 2.9% in July and look to head towards the desired 2% in a few months. The Fed has indicated the need to normalize and move away from the current “restrictive” monetary policy and its willingness to cut if inflation moves towards 2% rather than waiting to reach 2%. Shelter costs decelerated to 5.0%, still high but clearly trending down as a temporary oversupply of new apartment units will further dent the figures. Auto insurance continues to rocket, up by 19% from a year ago. This does not bode well for property insurance bills. Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely. Whoever sits in the White House in 2025 will see lower interest rates. However, a super-sized budget deficit could limit the decline in mortgage rates. More government borrowing means less mortgage money to lend. The new normal for mortgage rates will be around 6% and definitely not to 4% as was before COVID.

The National Association of REALTORS® reported that home prices continued to rise in the second quarter of 2024. National median prices rose 4.9% year over year to $422,100, and median home prices rose by 8.5% compared to the previous quarter. Of the 223 metro areas, 13% had double-digit year-over-year price increases in the second quarter of 2024. Monthly mortgage payments on a single-family home in the second quarter increased 10.3% to $2,262 compared to $2,050 from a year ago. Qualifying median family incomes rose to $108,600 compared to the first quarter of 2024, which was $97,731 (but was $98,405 a year ago). The effective 30-year fixed mortgage rate increased to 7.07% in the second quarter of 2024 compared to 6.57% one year ago. Median family incomes rose to $102,400 in the second quarter of 2024 compared to $97,119 a year ago.   Knowing the mortgage rates and the qualifying incomes for down payments will help potential homeowners figure out what metro areas are affordable for them. Here is a look at the metro areas with the strongest price growth in the second quarter of 2024, as well as the yearly change in median existing single-family home prices among the top five highest and lowest growth metro areas of the second quarter of 2024. The Five Metro Areas With the Highest Home Price Appreciation for Single-family Homes in Q2 2024 " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-top-five-single-family-metro-areas-with-highest-home-price-appreciation-q2-2024-bar-graph-08-13-2024-1300w-536h.png?itok=74ONTiSs" class="b-lazy" width="1200" height="495" alt="Bar graph: The Five Metro Areas with the Highest Home Price Appreciation for Single-Family Homes in Q2 2024" title="Bar graph: The Five Metro Areas with the Highest Home Price Appreciation for Single-Family Homes in Q2 2024"> The Five Metro Areas With the Lowest Home Price Appreciation for Single-family Homes in Q2 2024 " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-the-five-single-family-metro-areas-with-the-lowest-home-price-appreciation-q2-2024-bar-graph-08-13-2024-1300w-569h.png?itok=ru6zEZpP" class="b-lazy" width="1200" height="525" alt="Bar graph: The Five Metro Areas with the Lowest Home Price Appreciation for Single-Family Homes in Q2 2024" title="Bar graph: The Five Metro Areas with the Lowest Home Price Appreciation for Single-Family Homes in Q2 2024"> The Five Most Expensive Metro Areas for Single-family Homes in Q2 2024 " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-five-most-expensive-metro-areas-for-single-family-homes-q2-2024-bar-graph-08-13-2024-1300w-687h.png?itok=XsNSVJ7O" class="b-lazy" width="1200" height="634" alt="Bar graph: Five Most Expensive Metro Areas for Single-Family Homes in Q2 2024" title="Bar graph: Five Most Expensive Metro Areas for Single-Family Homes in Q2 2024"> The Five Least Expensive Metro Areas for Single-family Homes in Q2 2024 " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-five-least-expensive-metro-areas-for-single-family-homes-q2-2024-bar-graph-08-13-2024-1300w-705h.png?itok=dtyxp2lO" class="b-lazy" width="1200" height="651" alt="Bar graph: Five Least Expensive Metro Areas for Single-Family Homes in Q2 2024" title="Bar graph: Five Least Expensive Metro Areas for Single-Family Homes in Q2 2024"> Qualifying Income Based on Sales Price of Existing Single-family Homes for Metropolitan Areas by Region For the U.S., at the 5% down-payment threshold, the qualifying income for the second quarter of 2024 was $128,962. At the 10% down payment mark, the qualifying income was $122,175, and with a 20% down payment, the income required to qualify for a mortgage was $108,600. The West led all regions with the highest qualifying income, while the Midwest had the lowest income for 5%, 10%, and 20% down payments on a single-family home. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-us-and-regional-qualifying-income-based-on-sales-price-of-existing-single-family-homes-bar-graph-08-13-2024-1300w-774h.png?itok=_FNar5I1" class="b-lazy" width="1200" height="714" alt="Bar graph: US and Regional Qualifying Income Based on Sales Price of Existing Single-Family Homes" title="Bar graph: US and Regional Qualifying Income Based on Sales Price of Existing Single-Family Homes">

At the national level, housing affordability fell modestly in June compared to the previous month, according to NAR’s Housing Affordability Index. The monthly mortgage payment increased by 1.0% compared to the prior month, while the median price of single-family homes increased by 2.4%. The monthly mortgage payment increased by $23 from last month. Compared to one year ago, affordability fell in June as the monthly mortgage payment climbed by 6.3% and median family income rose by 5.9%. The effective 30-year fixed mortgage rate was 7.00% this June compared to 6.79% one year ago. Nationally, mortgage rates were up 21 basis points from one year ago (one percentage point equals 100 basis points). The median existing-home sales price rose 4.1% from ($432,700) compared to one year ago ($415,700). " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-housing-affordability-index-june-2023-to-june-2024-line-graph-08-13-2024-1300w-602h.png?itok=PLA4d3eD" class="b-lazy" width="1200" height="556" alt="Line graph: Housing Affordability Index, June 2023 to June 2024" title="Line graph: Housing Affordability Index, June 2023 to June 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-median-home-prices-june-2023-to-june-2024-line-graph-08-13-2024-1300w-585h.png?itok=HEroQgfo" class="b-lazy" width="1200" height="540" alt="Line graph: Median Home Prices, June 2023 to June 2024" title="Line graph: Median Home Prices, June 2023 to June 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-median-family-income-vs-qualifying-income-june-2023-to-june-2024-line-graph-08-13-2024-1300w-667h.png?itok=BiP5qf1U" class="b-lazy" width="1200" height="616" alt="Line graph: Median Family Income vs Qualifying Income, June 2023 to June 2024" title="Line graph: Median Family Income vs Qualifying Income, June 2023 to June 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-mortgage-rates-june-2023-to-june-2024-bar-graph-08-13-2024-1300w-588h.png?itok=qDQWkgl1" class="b-lazy" width="1200" height="543" alt="Bar graph: Mortgage Rates, June 2023 to June 2024" title="Bar graph: Mortgage Rates, June 2023 to June 2024"> The national index is currently below 100, which means that the typical family cannot afford to buy based on the median-priced home. An index below 100 means that a family with a median income had less than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments on a 30-year fixed mortgage loan with a 20% down payment account for 25% of family income. The most affordable region was the Midwest, with an index value of 119.2 (median family income of $100,539 with a qualifying income of $84,336). The least affordable region remained the West, where the index was 68.6 (median family income of $112,609 and the qualifying income of $164,208). The South was the second most affordable region with an index of 97.9 (median family income of $95,016 and the qualifying income of $97,008). The Northeast was the second most unaffordable region with an index of 84.3 (median family income of $115,410 with a qualifying income of $136,944). A mortgage is affordable if the mortgage payment (principal and interest) amounts to 25% or less of the family’s income. " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-june-housing-affordability-2024-and-2023-bar-graph-08-13-2024-1300w-588h.png?itok=Q4PKVneu" class="b-lazy" width="1200" height="543" alt="Bar graph: June Housing Affordability Index, 2024 and 2023" title="Bar graph: June Housing Affordability Index, 2024 and 2023"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-monthly-mortgage-payments-june-2023-to-june-2024-line-graph-08-13-2024-1300w-602h.png?itok=8wy7yB8u" class="b-lazy" width="1200" height="556" alt="Line graph: Monthly Mortgage Payments, June 2023 to June 2024" title="Line graph: Monthly Mortgage Payments, June 2023 to June 2024"> " data-src="https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-us-and-regional-median-family-income-and-qualifying-income-bar-graph-08-13-2024-1300w-673h.png?itok=ywf-In6I" class="b-lazy" width="1200" height="621" alt="Bar graph: U.S. and Regional Median Family Income and Qualifying Income" title="Bar graph: U.S. and Regional Median Family Income and Qualifying Income"> Housing affordability declined in two of the four regions from a year ago. The Northeast region had the biggest decline (6.5%), followed by the Midwest, which dipped 1.7%. The South experienced an incline of 2.2%, followed by the West, which rose modestly 0.9%. Affordability rose in two four regions from last month. The West region had the biggest incline of 2.2%, followed by the South with a gain of 1.5%. The Northeast had the largest decrease of 6.9%, and the Midwest had the smallest reduction of 1.3%. Compared to one year ago, the monthly mortgage payment rose to $2,303 from $2,166, an increase of 6.3%. A year ago, the monthly mortgage payment increased by $137. The annual mortgage payment as a percentage of income increased to 26.8% this June from 26.7% a year ago. Regionally, the West has the highest mortgage payment to income share at 36.5% of income. The Northeast had the second-highest share at 27.6%, followed by the South at 26.1%. The Midwest had the lowest mortgage payment as a percentage of income at 20.8%. Mortgage payments are not burdensome if they are no more than 25% of income. Median home price growth has hampered affordability for potential home buyers. Mortgage rates have come down from prior months and hopefully will continue to trend in that direction. Median family incomes continue to grow. Last week the Mortgage Bankers Association reported an increase in credit availability in July. Mortgage applications also increased 6.9% from one week earlier. Read the full data release. The Housing Affordability Index calculation assumes a 20% down payment and a 25% qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.

Download (PNG: 173 KB) | Metro Area Prices & Affordability Data | News Release " data-src="https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/downloadable/2024-q2-10-metro-areas-with-largest-percent-gain-in-existing-home-price-us-map-infographic-08-13-2024-1000w-1500h_0.png?itok=H6d_qJnM" class="b-lazy" width="1001" height="1500" alt="2024 Q2 Metro Areas With Largest Percent Gain in Existing Single-Family Home Home Price Infographic"> The top 10 metro areas with the largest year-over-year price increases all recorded gains of at least 14.1%.