Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Continuing elevated home prices and high mortgage rates make for steep housing payments: During the four weeks ending April 7, the median monthly U.S. housing payment was up 11% from a year ago, reaching an all-time high of $2,747. And it's likely mortgage rates will remain elevated for the foreseeable future, according to real estate brokerage company Redfin, as daily average mortgage rates reached their highest level in nearly five months following a hotter-than-expected inflation report released on April 10.
Despite those conditions, Q1 2024 homebuyer demand is robust:
Prices are staying stubbornly high because there’s enough homebuying demand to prop them up. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–is at its highest level since last July, and a separate measure of tours shows they’ve increased 33% since the start of 2024, much bigger than last year’s increase over the same period (that’s partly because Easter fell during this week last year). And even though supply is picking up–new listings rose 14% year over year–inventory is still low compared to typical spring levels, meaning there’s competition for many of the homes that are on the market.