Housing Market 2024: Sales and Listings Rise in Expensive US Cities Like Seattle and LA
The 2024 housing market is picking up in high-cost cities like Seattle, Los Angeles, and San Jose, as more homes hit the market and buyers take advantage of improved mortgage rates
The US housing market is starting to show signs of improvement, especially in some of the country’s most expensive regions. More homes are being listed for sale, and buyers are beginning to close deals, hinting that the market may be slowly recovering after being stalled by rising mortgage rates.
However, this recovery faces challenges, particularly from homeowners who are holding on to their ultra-low mortgage rates. Many of them are reluctant to sell because they don’t want to deal with today’s higher rates, which are now over 6%. This situation, known as the "rate lock-in effect," is keeping many homes off the market. According to Zillow’s housing economist Kara Ng, "While new listings and sales are slowly getting back to what we saw before the pandemic, the supply of homes for sale still has a long way to go before it’s truly normal."
Upscale Markets See Strong Recovery
High-end markets, particularly in cities like Seattle, Los Angeles, and San Jose, are showing the most improvement. These areas typically have more buyers who rely on financing and larger loans, so even small drops in mortgage rates can lead to big savings on monthly payments. This has sparked more interest from buyers. In some places, listing prices have even dropped slightly, further encouraging sales.
In September, roughly 950,000 homes were available for sale across the country. Although that number has been steadily increasing this year, it’s still 22% lower than pre-pandemic levels in 2019. Major cities like Seattle, Silicon Valley, Denver, and Washington, D.C., have seen a big rise in new home listings, with increases of 25% or more compared to last year. Homes in these areas typically have high price tags, with the median price above $599,000.
Tim Nguyen, a real estate agent in Santa Clara, California, where the average home lists for more than $1.4 million, noted that even a slight drop in mortgage rates can make a big difference for buyers. "For a $1 million home, just a 1% drop in mortgage rates can save buyers over $500 every month. That’s a huge relief for families when they’re also managing other bills," Nguyen explained.
Pending Home Sales Increase, But Caution Remains
Pending home sales—homes that are under contract but not yet sold—have also picked up in places like Portland, Seattle, and parts of California. Data shows that pending sales increased by 3.2% nationwide in the past month, which is the largest rise in over three years. However, this improvement is happening from a very low point. A year ago, high mortgage rates of nearly 8% had significantly slowed down the housing market, and sales activity has remained at low levels for several years.
Troy Khuu, a real estate agent in San Jose, said that while demand for certain types of homes has picked up, buyers are now being more selective. "People aren’t rushing into purchases like they were a few years ago. Buyers want homes that check all their boxes—good school districts, close to tech hubs, and recently updated," Khuu said. "But if a home doesn’t meet their needs, they’re willing to wait."
Seasonal Slowdown Expected for Winter
As the colder months approach, homebuying typically slows down. September is often seen as the "last call" for the housing market before winter sets in. Recently, mortgage rates have begun rising again, and mortgage applications for home purchases have slowed down as a result.
Danielle Hale, the chief economist at Realtor.com, said, "We’re making progress, but it’s slow. The rate lock-in effect is still holding the market back, and it could take a while before we fully recover."
What to Expect Next in the Real Estate Market
The housing market is likely to keep fluctuating, with mortgage rates continuing to play a big role in buyer activity. With rates hovering around 6%, many homeowners will continue to stay put unless rates drop significantly. But in higher-cost areas, even small reductions in mortgage rates have shown they can reignite buyer interest.
For buyers looking to make a move, now might be a good time to consider their options, especially in markets where listing prices are dropping and more homes are becoming available. But with winter approaching and rates likely to rise again, both buyers and sellers will need to weigh their options carefully in the months ahead.
iShook Finance Expert Thought
The housing market is making slow progress, particularly in expensive regions where buyers are more sensitive to changes in mortgage rates. While there are signs of improvement, the rate lock-in effect continues to hold many homeowners back from selling. Both buyers and sellers need to approach the market with patience and care. For buyers, securing a home now may offer better terms before rates potentially rise further.
Also Read: October Sees Boost in US Homebuilder Confidence Despite Climbing Mortgage Rate
