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Top Compromises Buyers Will Make to Reach Homeownership

Plus, Visualized: The Most In-Demand Jobs of the Next Decade and 6 More Real Estate Trends

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A Quote

"There are no facts, only interpretations." — Friedrich Nietzsche

Latest Rates

Loan Type

Rate

Daily Change

Weekly Change

52-Week Low/High

30 Yr. Fixed

7.11%

-0.01%

-0.08%

6.61/8.03

15 Yr. Fixed

6.61%

-0.01%

-0.03%

5.95/7.35

30 Yr. FHA

6.58%

-0.01%

-0.04%

6.00/7.44

30 Yr. Jumbo

7.37%

+0.00%

-0.04%

6.38/8.09

7/6 SOFR ARM

7.29%

-0.01%

-0.01%

6.11/7.55

30 Yr. VA

6.59%

-0.01%

-0.05%

6.02/7.46

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Real Estate Trends

CRE Transaction Numbers May Be Seeing Some Recovery link

  • CRE transaction volumes show signs of rebounding with a less severe year-over-year decline. The decline was -8.0% in Q1 2024, an improvement from -18.4% in the previous quarter.

  • Large transactions in Q4 2023 skewed early 2024 figures. Notably, transactions like the $2 billion sale of 250 Vesey St. and the $1.5 billion sale of Two Manhattan West dominated Q4.

  • A full recovery to pre-pandemic levels hinges on lower interest rates. The Federal Reserve's policies will be crucial to sustaining this recovery trend.

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Many Secondary Markets Experiencing Increase in Apartment Asking Rates link

  • Despite economic uncertainties, secondary markets are seeing a rise in apartment rents, bucking the trend of falling rates in major cities. This shift indicates a growing interest in smaller, potentially more affordable urban areas.

  • Many secondary markets in the Midwest, Northeast and South are experiencing increases in asking rents. Rent rises over 2% have occurred in Albany, NY, Milwaukee, Worcester-Springfield, Louisville, Cincinnati, Des Moines, Richmond, Madison, Portland, ME, Lafayette OH, Youngstown, Providence, Northern Virginia and Scranton-Wiles-Barre. Outside the mainland, Honolulu “is a serious positive outlier at 5.7% growth year-to-date.”

  • The Yardi Matrix report predicts a possible downturn in the multifamily sector but suggests that a Fed rate cut by year-end could alleviate pressures. This could provide a more favorable environment for continued rent increases in these markets.

Affordability Pyramid Shows 66.6 Million Households Cannot Buy a $250,000 Home link

Image

  • Nearly 67 million U.S. households cannot afford a $250,000 home under current economic conditions. This figure illustrates the vast gap in housing affordability facing a significant portion of the population.

  • The housing affordability pyramid breaks down the income levels required for different home prices. For example, a household needs a minimum income of $45,975 to afford a $150,000 home at a 6.5% mortgage rate.

  • Only about 3 million households can afford homes priced over $1.6 million, highlighting a stark disparity in housing accessibility. Most Americans are concentrated at the lower, more affordable tiers of the housing market.

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Something I found Interesting

Mixed Signals for Peak Home Buying Season link

  • Home inventory continues to rise, especially in the South, reflecting varied market dynamics as some areas see acceleration while others slow down. Current U.S. inventory stands at 568,000 homes, with a significant annual increase of 35%.

  • Despite a 7% mortgage rate, home sales volumes slightly exceed those of last year, though the increase is marginal, suggesting many potential buyers remain cautious.

  • Real-time data indicates weaker than reported home price growth, with some measures showing stagnant year-over-year prices. Future expectations suggest a decrease in home price headlines in the latter half of the year.

One Chart

Top Compromises Buyers Will Make to Reach Homeownership

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Off Topic

Charted: The Most In-Demand Jobs of the Next Decade

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Vidit

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