In this pre-presidential-election landscape, many market watchers, potential buyers and sellers, and industry experts are keeping a close eye on trends. The recently released S&P/Case-Shiller Home Price Index report (as of August 2024) supports the stance that the best move for today’s buyer could be to jump in the market now versus taking the risk of purchasing when prices are even higher down the line.
The above graphic illustrates that home price gains nationally are still positive in August, year-over-year, just at a pace that is decelerated from prior months. This would make sense given the increased inventory levels and peaking mortgage rates. It’s important to note that the first Fed rate cut wasn’t until the September 2024 meeting.
In the Seattle Metro Area, we are still seeing month-to-month growth and just over 5% annual home price increases. Stated another way, the typical home is gaining 0.41% in equity each month. During Economist Matthew Gardner’s keynote presentation during RSIR’s Market Maker event (stay tuned for a full recap), predicted that home prices are not set to correct but in fact, rise in the years ahead given the imbalance of supply and demand. So, the recommendation to “buy then refi” holds as the temporary infliction of a higher mortgage rate is not as punitive overall as paying a higher strike price, or worse, living in a home you don’t love.
It is odd that mortgage rates have crept up again, but experts are confident that more rate cuts are in our future as inflation is in check. Understandably, FOMI (Fear of Mortgage Interest) is a factor, as is FOPO (Fear of Political Outcome), but FOMO (Fear of Missing Out) will more likely be the verdict for consumers that don’t take advantage of the temporary instability in the markets and likely bounce in the market post-election.