Homebuyers Have Gained Nearly $30,000 in Purchasing Power Over the Last Month

New here? Join the newsletter (it's free).

Mortgage rates drop to the lowest point in 2024 link

• Mortgage rates have dropped to an average of 6.8% for a 30-year conventional loan, marking the lowest point in 2024. This decline follows a cooler-than-expected jobs report and speculation of a Federal Reserve rate cut.

• Rates have been above 7% for much of the past six months, but originators are now offering even lower rates for some loans. Government loan rates are now in the high 5% to low 6% range.

• Market analysts predict further rate cuts by the Fed, with Bank of America expecting over 100 basis points of cuts by year-end. However, mortgage rates may not align directly with these federal rate changes.

U.S. Homeownership & Rental Vacancy Rates for Q2 2024 link

• The national rental vacancy rate for Q2 2024 is 6.6%, while the homeowner vacancy rate is 0.9%. These rates are stable compared to Q1 2024, indicating consistency in the housing market.

• Homeownership stands at 65.6% nationwide, with 58.8% of housing units being owner-occupied. This highlights a continued preference for owning homes over renting in the U.S.

• Overall, 89.6% of housing units are occupied, with 10.4% vacant. Seasonal vacancies account for 2.4% of the total, showing a small but notable portion of the market reserved for non-permanent residents.

The financial markets are freaking out. That is good for mortgage link

• Financial market turbulence has caused significant interest rate declines, benefiting the U.S. mortgage market. The 10-year Treasury yield fell to 3.76%, the lowest since June 2023.

• Mortgage rates have dropped, leading to a surge in rate locks. Borrowers now save significantly on mortgage costs, with some seeing reductions from 1.213 points to 0.375 points.

• Analysts predict further rate cuts, with the Fed funds rate potentially dropping by 200 basis points by mid-2025. This could boost purchase activity and support mortgage originators and insurers.

Outlook Remains Positive for Multifamily Sector After Strong Q2 for Public REITs link

• Low turnover rates are a key positive trend, with many REITs reporting historically low levels of resident move-outs to buy single-family homes. This stability supports higher rent changes and stable occupancy.

• Despite a softening overall employment picture, employment trends among renters remain strong, particularly for higher-earning demographics. This has helped maintain demand and financial stability for multifamily REITs.

• Technology integration is boosting operational efficiency, with AI platforms managing communications and leasing processes. Veris Residential's AI assistant, Quinn, converted 34% of leads into tours and saved 5,000 staff hours.

Homebuyers Have Gained Nearly $30,000 in Purchasing Power Over the Last Month Thanks to Mortgage-Rate Drop link

• The average mortgage rate has dropped to 6.35%, increasing the purchasing power for homebuyers by nearly $30,000 within a month. This improvement is significant compared to the 7.15% rate at the start of July.

• A $3,000 monthly budget now allows buyers to afford a $466,000 home, up from $437,250 a month ago. The monthly payment on a median-priced U.S. home has decreased by nearly $200 in the same period.

• Falling mortgage rates, driven by a weak jobs report, present an opportunity for buyers. However, rising demand may soon push home prices higher, potentially offsetting the benefits of lower rates.

Stock Market Turbulence Could Trip Up Home Sales—and These Cities Could Get Hit First

Treasury Decline Unlocks New Opportunities In This Asset Class

What buyers agents are being paid in your market

Emerging Trends in Retail Leasing: What You Need to Know

Phoenix industrial properties are doing something new to create significant demand

Ranked: Athletes with the Most Olympic Medals

Who wants a hot tub?!🛁

Link to the listing

That's all, folks.

Cheers,

Vidit

P.S - Read past newsletters here