Category Archives: Market Update

Final 2024 Sales Stats

Market Update

End of year fourth quarter 2024 sales statistics showed that the average sales price of Lansing area homes increased 15.2% from $223,968 at the end of 2023 to $257,888. This represents an average home value improvement of $33,920.

The fact that there were 148 fewer sales in 2024 (-2.6%) represents the lowest number of annual homes sales since the 1990’s but does not indicate a problem with the health of the real estate market.

The 15.2% increase in home value indicates strong buyer enthusiasm by those purchasing a home in the Lansing area. However, higher prices coupled with higher mortgage rates has made it difficult for first time home buyers to pursue the dream of home ownership.

Fourth Quarter 2024 Sales Statistics

Snapshot of current Lansing area sales entering into February 2025:
 632 – currently listed homes for sale in the five county greater Lansing area.
 198 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
 203 – homes listed as Pending. (Have completed inspections and will soon close.)
261 – homes that have closed since January 1, 2025. 

Possible Lower Mortgage Interest Rates for Spring Homebuying

Finance and Taxes, Market Update

Once the outcome of the presidential election was known, 30-year mortgage interest rates slowly decreased through the end of 2024 from the high 6% range, into the mid-to-low 6% range. Forecasters predicted that they’ll continue to soften in time for the spring 2025 homebuying season.

  • Wells Fargo agrees that rates will dip below 6% in Q2 2025.
  • Fannie Mae predicts that mortgage rates will average 5.7% in 2025.
  • The Mortgage Bankers Association says rates between 2024 and 2025 will drift between 6.3% by Q4 2024 and 5.9% by Q3 2025.
  • The National Association of Home Builders predicts that rates will average 5.94% in 2025, with “sustained, sub-6% mortgage interest rates” beginning in Q2 2025.

Federal Reserve leaders say that forecasting interest rates is highly uncertain. While there are trends that suggest that the interest rate forecast for spring 2025 will be lower, it all depends on developing economic conditions. For that reason, don’t try to time the market. You can always refinance if interest rates drop.

Why Timing the Market Rarely Works

Finance and Taxes, Market Update

Mortgage interest rates are slowly drifting lower, giving a much-needed boost to both homebuyers and home sellers. Yet, home prices continue to rise, even as more sellers put their homes on the market. Why? The U.S. is still several million homes short of a balanced market. So, do you want to wait for cheaper rates or go ahead a buy a home before home prices rise further?

To time the housing market perfectly, you need to:
1. Find the right home.
2. Buy at the right price.
3. Obtain the right mortgage interest rate.

You may get lucky and get one out of three or even two out of three, but it’s nearly impossible to get all three at the same time unless the market is in a recession or depression. Only then will there be plenty of homes to choose from, low prices, and low mortgage interest rates.

    Start with finding the right home—one that best meets your household’s needs for space and features, your finances, and a reasonable interest rate.

    Lansing Area Home Prices Up 8.8%

    Market Update

    Third quarter 2024 sales statistics showed that the average sales price of Lansing area homes increased 8.8% from $240,458 at the end of the third quarter in 2023 to a new high of 261,618. This represents an average home value improvement of $21,160.

    The fact that there were 71 fewer sales so far in 2024 (-1.7%) represents a lower number of homes being offered for sale with established homeowners reluctance to give up a 3.5% mortgage in order to enter into a now 6.44% mortgage on a different home.

    The 8.8% increase in home value indicates strong buyer enthusiasm by those moving into the Lansing area and those able to adjust to higher mortgage rates. First time home buyers have been hit hard with the increased interest rates that require budgeting changes and higher down payments. Local lenders and the State of Michigan’s MSHDA program have offered relief with mortgage incentives that accommodate lower income buyers.

    Third Quarter 2024 Sales Statistics

    Snapshot of current Lansing area sales entering into the Spring selling season:
    Lansing Area Market View –October 31, 2024
     786 –     currently listed homes for sale in the five county greater Lansing area.
     244 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
     298 – homes listed as Pending. (Have completed inspections and will soon close.)
     4590 – homes that have closed since January 1, 2024. 

    Are Mortgage Interest Rates Going Down?

    Finance and Taxes, Market Update

    Homebuyers saw a turning point in interest rates beginning in June 2024. The Federal Reserve decided not to raise overnight borrowing rates, keeping them at 5.25%-5.50%. This is a sign that inflation is moving closer to the Fed’s 2% target. However, the Fed anticipates only one rate cut by year-end, which could impact the housing market.

    Mortgage rates have decreased to their lowest levels since March 2023 but remain around 7% for the 30-year fixed mortgage. This rate is typically available only to those with excellent credit and a 20% down payment, which might explain why housing sales are 10% below mid-2023 levels.

    Most economists expect rates to drop slightly by the end of 2024. Fannie Mae predicts an average rate of 7%, while the Mortgage Bankers Association, Realtor.com, and Wells Fargo forecast a drop to 6.5%. The difference between 7% and 6.5% is $122 per month on a $400,000 mortgage.

    Even with fewer sales… home values increase

    Current Lansing Area Sales Statistics, Market Update

    Second quarter 2024 sales statistics, ending June 30th, showed that the average sales price of Lansing area homes increased 10.9% from $235,475 at the end of the second quarter of 2023 to $261,087. This represents an average home value improvement of $25,612.

    The fact that there were 131 fewer sales so far in 2024 (-4.8%) represents a lower number of homes being offered for sale with established homeowners reluctance to give up a 3.5% mortgage in order to enter into a now 6.78% mortgage on a different home.

    The increase in home value indicates strong buyer enthusiasm by those moving into the Lansing area and those able to adjust to higher mortgage rates. First time home buyers have been hit hard with the increased interest rates and home insurance that require budgeting changes and higher down payments. Local lenders and the State of Michigan’s MSHDA program have offered relief with mortgage incentives that accommodate lower income buyers.

    First Quarter 2024 Sales Statistics

    Snapshot of current Lansing area sales entering into the Spring selling season:
    Lansing Area Market View –August 1, 2024
    634 –     currently listed homes for sale in the five county greater Lansing area.
     285 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
     345 – homes listed as Pending. (Have completed inspections and will soon close.)
     3012 – homes that have closed since January 1, 2024. 

    Current Mortgage interest rates 
      30-year fixed – 6.77% ($6.49 per $1000)
      15-year fixed – 6.44% ($8.47 per $1000)

    Lansng Area Home Values Increase 13.8%

    Current Lansing Area Sales Statistics, Market Update

    First quarter 2024 sales statistics showed that the average sales price of Lansing area homes increased 13.8% from $217,376 at the end of the first quarter of 2023 to $247,308. This represents an average home value improvement of $29,927.

    The fact that there were 121 fewer sales so far in 2024 (-11.1%) represents a lower number of homes being offered for sale with established homeowners reluctance to give up a 3.5% mortgage in order to enter into a now 7.17% mortgage on a different home.

    The 13.9% increase in home value indicates strong buyer enthusiasm by those moving into the Lansing area and those able to adjust to higher mortgage rates. First time home buyers have been hit hard with the increased interest rates that require budgeting changes and higher down payments. Local lenders and the State of Michigan’s MSHDA program have offered relief with mortgage incentives that accommodate lower income buyers.

    First Quarter 2024 Sales Statistics

    Snapshot of current Lansing area sales entering into the Spring selling season:
    Lansing Area Market View –May 1, 2024
     436 –     currently listed homes for sale in the five county greater Lansing area.
     258 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
     381 – homes listed as Pending. (Have completed inspections and will soon close.)
     1454 – homes that have closed since January 1, 2024. 

    Current Mortgage interest rates 
      30-year fixed – 7.17% ($677 per $1000)
      15-year fixed – 6.44% ($868 per $1000)

    Business as usual in the Lansing area housing market

    Current Lansing Area Sales Statistics, Market Update

    The spring home-buying season has begun, and it’s business as usual. The combination of high mortgage rates, and home prices, along with low housing inventory means that home buyers will have to adjust to the reality of elevated home prices and mortgage rates if they want to buy a home in the near future.

    Will there be a significant change in the 2024 housing market?
    There has been discussion about rates dropping a percentage or two, but a 6% loan isn’t going to push current home owners into giving up a home with a 3.5% mortgage. Perhaps 5% will look attractive to first time home buyers…but would you give up your 3.5% mortgage to move in this competitive market?

    Of course, lower mortgage rates would stimulate sales…but also drive up property values as it did during the years of 3% and 3.5% loans. Armed with affordable loans, buyers will need to make  competitively high offers to land a home in a market with low inventory.

    Snapshot of current Lansing area sales entering into the Spring selling season:
    Lansing Area Market View – April 1, 2024
     418 –     currently listed homes for sale in the five county greater Lansing area.
     249 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
     325 – homes listed as Pending. (Have completed inspections and will soon close.)
     982 – homes that have closed since January 1, 2024. 

    Current Mortgage interest rates 
      30-year fixed – 6.79% ($651 per $1000)
      15-year fixed – 6.11% ($849 per $1000)

    The Lansing area housing market is experiencing an unprecedented trend.

    Market Update

    Home sellers currently receive historically high prices for their homes…yet fewer home sellers are putting their properties on the market…despite the temptation to cash in. The reason is, that mortgage interest rates are more than double what they were just prior to July 2022.
    Home owners with low interest rate mortgages are unwilling to give them up! 

    Many are only selling their home if they can pay cash for their next home, downsize to something smaller with less upkeep, or move to a new city and state where a similar home is less expensive than the one they’re selling. 

    Residential Real Estate Values Depend on Sales
    The number of available homes for sale (currently 447) is constantly growing or shrinking with market trends dependent on the sales prices of closed listings, time on market, price increases and/or reductions. It’s no secret that inflation, interest rates, uncertain economic conditions, weather, and even politics are having an affect on the 2024 real estate market.

    Home Listings are Vital
    However, 5608 Lansing area homes closed in 2023 with mortgage rates as high as 8%. The 447 currently listed homes represent a residential housing inventory that will be ‘sold out’ in five weeks!

    Navigating the 2024 Housing Market

    Market Update

    In the new year, homebuyers and sellers are still facing the same challenges as they did in 2023—high interest rates, sky-high home prices, and an inadequate supply of homes. As affordability issues slow housing sales volume, low supplies are keeping home prices high.

    Mortgage interest rates reached 8.01% in October, the highest level since 2000, but since then rates have come down. Bankrate.com experts say there’s no likelihood of a housing market turndown as long as lending standards remain strict, and there aren’t enough homes to meet demand. 

    Banks are tightening their lending standards due to increases in credit card and car loan delinquencies, according to Freddie Mac. This is also impacting mortgage applications, credit lines and refinance activity – loan originations were down approximately 30% in October 2023 from the previous year.  The good news is that mortgage delinquencies are low compared to other loan types.  Inflation is waning, but still remains above the Federal Reserve’s target of 2%. Consumer spending will decelerate due to slower economic and weaker employment growth which will cause rates to come down in 2024. Continuing homebuyer demand will keep home prices elevating 2.6% in 2024, but with rates dipping as low as 6%, housing will be a little more affordable.

    The Federal Reserve’s aggressive handling of inflation by raising overnight borrowing rates to banks has had a positive effect, and further rate hikes appear unlikely as the numbers get closer to the Fed’s target of 2% inflation.

    Meanwhile, help is out there for those being squeezed out of the market. FHA-guaranteed loans require as little as 3.5% down. Numerous state and local governments have increased programs for first-time and lower-income homebuyers. Many lenders offer grants, down payment assistance programs, and mortgages with no closing costs. The National Association of REALTORS® offers the Housing Opportunity Program, with resources for homebuyers.

    While many potential homebuyers have been knocked out of the market by higher mortgage interest rates and home prices, there’s hope on the horizon that they’ll have better luck in 2024.