10/30/2024
Market of Mixed Expectations
September saw a mix of expectations as mortgage rates fell, inventory levels increased, yet home
prices remained elevated.
Mortgage rates have been trending downward since spring, and in September, we saw interest rate
cuts of 0.5% by the US Fed and 0.25% by the Bank of Canada. In the U.S., interest rates dropped as
low as 4.75% on average, while in Canada, they fell to around 4%. This helped bring down some
mortgage rates to their lowest levels in over a year.
However, buyers have been slow to respond. This reluctance is partly due to elevated home prices but
also because many are waiting to see if rates will drop further.
Institute members report that some potential buyers are holding out, waiting to see if rates will
drop further – some hoping to see rates as low as 5%. In the U.S., additional hesitation comes
from uncertainty surrounding the new National Association of Realtors’ rules and the upcoming
presidential election.
Despite this, demand showed signs of picking up, with agents reporting increased early-stage activity,
such as visits to real estate websites, property viewings, mortgage applications, and pending offers.
Pending sales saw an uptick in late September spurred by the interest rate cuts, even though mortgage
rates had been declining for several weeks in anticipation the changes.
Sales trends in September varied across property types. Based on the 150 markets reviewed by The
Institute, single-family home sales rose by 5.11% while condominium and townhome sales fell by
4.22% also creating a mix picture of the market.
New listings also increased significantly, with a year-over-year uptick of 17.52% for single-family
homes and 18.31% for condominiums and townhomes. Unlike the rise in pending sales, which reflects
a recent trend, both inventory levels and new listings entering the market have been growing for
nearly a year.
NORTH AMERICAN LUXURY REVIEW