By Alex Veiga | The Associated Press
The housing market shows few signs of busting out of its three-year funk after a disappointing spring season and amid a gloomy outlook for the summer and fall.
Home shoppers came into 2024 with optimism that mortgage rates would ease further after a decline late last year. But those hopes faded as stronger-than-expected data on inflation and the economy clouded the timing of a possible rate cut by the Federal Reserve.
By April, the average rate on a 30-year home loan moved above 7% for the first time since November. That, plus record-high home prices, forced many would-be homebuyers to put their house hunt on hold — some indefinitely.
Economists are projecting mortgage rates will ease modestly by the end of this year. But a small decline in rates may not be enough to entice home shoppers and persuade homeowners it’s a good time to sell.
Here is a look at the key trends behind the housing market’s trajectory so far this year and what homebuyers and sellers can expect in the second half of 2024:
The spring homebuying season was a bust — again
On average, more than one-third of all homes sold in a given year are purchased between March and June. This is known as the spring homebuying season, and it’s been a downer in recent years.
Sales of previously occupied U.S. homes fell in the March-June period from a year earlier in 2022 and 2023. Sales declined in March, April and May of this year, and indications are that June saw a pullback as well.
The weak spring sales are a reflection of the affordability challenges many home shoppers face: the average rate on a 30-year mortgage rate is moored near 7%; the supply of homes for sale is historically low; and home prices are at record highs.
High rates deter homebuyers
The average rate on a 30-year mortgage is at 6.95%, according to mortgage buyer Freddie Mac. That is more than double where it was in early July 2021.
Mortgage rates are influenced by several factors, including how the bond…
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