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Reflecting on the first half of the year can help savvy mortgage professionals just like you successfully prepare for the second half.
If you’re like most mortgage professionals (and even a whopping 76% of consumers) the first half of this year may have had you feeling more than a little bit beat down.
Between constantly rising prices, persistently high interest rates, severely limited inventory, and a significantly slower refinance market, this year’s Q1 and Q2 weren’t exactly home runs.
But reflecting on and learning from these trends may be able to help pave the way for a brighter future. That’s why we’ve compiled some data on the first half of 2024 for your comprehensive mortgage industry recap.
Together, we’ll cover some of the top trends, get to know the relevant numbers, and get a feel for what they might mean moving forward. That way, you can hit Q3 running and knock the rest of the year straight out of the park.
Let’s dive in!
Prices Continued to Climb
Rising prices have been a harsh reality of the real estate market in recent years, and the first half of 2024 was no different.
As of June, the United States saw a 4.3% increase in pricing year-over-year, bringing the average home value up to $360,681.
The fastest-growing cities across the nation included:
- San Diego, California (11.4% year-over-year price hike)
- Chicago, Illinois (8.9% year-over-year price hike)
- Detroit, Michigan (8.9% year-over-year price hike)
Portland, Oregon, saw the lowest year-over-year price hike at 2.2%.
On the whole, prices are up 8% across 10 major cities and 7.3% across 20 more. Both figures are categorized as “all-time highs.”
So, while there may be some ebbs and flows moving forward, and while your local market will always come with its own unique numbers, rising prices are a reality that clients may simply need to accept. That likely goes for the remainder of 2024 and beyond, unfortunately.
Mortgage Rates Rose
While mortgage rates did drop to 6.6% in the early days of 2024, and while there were some other minor dips along the way, they ultimately climbed back up throughout Q1 and Q2. The year’s peak thus far came at the start of May, reaching 7.22%.
Combined with high prices, these figures had many would-be buyers (particularly first-timers) sitting and waiting on the sidelines.
The good news? If mortgage rates drop in the second half of the year, as projected, some might just become clients of yours!
Inventory Stayed Lean
Low inventory was another complicating factor that characterized much of Q1 and Q2 2024. The simple fact is that there were just not many homes on the market.
The record-low interest rates seen throughout the COVID-19 era are a big reason for this trend. As of June 2024, more than 60% of outstanding mortgages had interest rates below 4%. It’s no wonder many of those homeowners just aren’t willing to throw that away by putting their homes on the market.
As such, first-time buyers certainly struggled. After all, you can’t buy what isn’t for sale.
After the inventory for smaller, more affordable increased in May, there is continued hope that inventory may improve in the second half of the year, a sentiment you should plan to share with any clients in this demographic.
Refinances Remained Difficult
As you likely well know, with the aforementioned higher rates, the refinance market was not at its strongest. Owners were primarily satisfied with their mortgage interest rates, meaning that not only did they refrain from listing, but many also did not choose to refinance.
Of course, there were some variable rises and dips throughout the months. But, on the whole, refinance applications were down year-over-year.
If mortgage rates drop before the end of 2024, as predicted, the second half of the year might just see more momentum related to refinances. So, you may want to stay agile.
Some Buyers Still Had Hope
We promise it’s not all bad, though! Despite these challenges, a number of buyers remained hopeful through the first half of the year.
At the start of 2024, more than one in ten Americans (12%) reported that they planned to purchase a home within the year. While they did acknowledge some very real obstacles in the same breath, this sentiment shows that the American dream of homeownership is still kicking.
And if history is any indication, this trend should likely continue through the rest of the year and even into 2025 — a promising prospect for real estate and mortgage professionals alike!
Final Thoughts: Wrapping Up the First Half of 2024
So, were your clients plagued by high prices? Or still interested in refinancing, despite the general opinion on rates?
Whatever the case may be, reflecting on and understanding these Q1 and Q2 trends can only help you prepare for the future. And, with any luck, the second half of the year will hopefully blow the first half right out of the water.
Now, let’s finish out the year strong!
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