The second quarter of 2024 showcased a resilient but challenging real estate market, characterized by high demand, rising prices, and a continued inventory shortage.
Inventory levels remained historically low, particularly in desirable urban and suburban areas. This persistent shortage has intensified competition among buyers in many markets, driving up home prices. Although there was a slight increase in new listings compared to the first quarter of 2024, it was not sufficient to significantly alleviate the overall shortage.
Home prices continued to rise, although the rate of increase slowed slightly compared to previous quarters. The national median home price1 increased in the second quarter of 2024 year-over-year by 4.6%, with some regions, particularly in the West and South, seeing higher price growth compared to the Midwest and Northeast.
Mortgage rates averaged between 6.5%-7.0%2 for a 15 and 30-year fixed-rate mortgage during June 2024. However, demand remained strong, enhanced by increasing numbers of millennials entering their peak homebuying years. Rates continue to impact affordability, particularly for first-time homebuyers, with many being priced out of competitive markets.
The rental market saw strong demand, particularly for single-family homes. This trend was driven by those unable to purchase homes due to high prices and mortgage rates as well as a lack of resale inventory. Rents increased across most markets, with some of the highest growth seen in suburban and secondary cities.
Real estate investors, including institutional investors, remained active, purchasing single-family homes and multi-family properties for rental income. The market for short-term rentals rebounded, particularly in vacation destinations, as travel picked up.
There continues to be a growing interest in sustainable and energy-efficient homes. Buyers are increasingly looking for properties with green certifications and eco-friendly features.
The market outlook for the remainder of 2024 is cautiously optimistic. While challenges such as high prices and mortgage rates persist, underlying demand remains strong.
Whether we’re helping you find your first apartment in the big city, relocating to a new home in the suburbs, or searching for a well-earned second home in the countryside, sunshine destination, or winter resort. We value the confidence you place in us and take that responsibility seriously.
Dawn McKenna
Founder of the Dawn McKenna Group
of Coldwell Banker
1. Home Affordability Gets Tougher During Second Quarter Across U.S. As Prices Shoot Up
2. Mortgage Rates Dip Below 7% for First Time in Months