Compass Real Estate Insights February 2024

Compass Real Estate Insights February 2024

  • Amy Pedersen
  • February 28, 2024

Compass February 2024 real estate report highlights on prices, sales, listings, cash purchases, interest rates, and confidence.

Interest rates are well below those seen late last year, but have started ticking up in mid-February. 

Chart of weekly 30-year mortgage rates in 2023–2024, peaking near 7.8% in October and ending at 6.9%.

Through February 22nd, stock markets have continued to rebound dramatically, deeply impacting household wealth - especially among more affluent buyers.

S&P 500 index chart from 2014 to February 2024, showing a new all-time high above 5,000.

Having plunged from its peak in mid-2022, the inflation rate has not dropped as quickly as expected in recent months, a big factor in mortgage interest rates.

Chart of monthly CPI and Core CPI year-over-year changes from January 2021 to January 2024.

As a percentage of total sales, the share of transactions being completed by buyers paying all cash has continued to climb.
 
Bar chart of U.S. all-cash buyers, rising to 32% in January 2024, the highest monthly level in almost 10 years.
 
Median home sales prices rise and fall to seasonal supply and demand dynamics, and January prices mostly reflect the slow December market. Still, U.S. house and condo/co-op prices were up 5% & 5.7% respectively year-over-year.
 
Chart of U.S. median single-family home sales prices from 2019 to January 2024, with monthly bars and seasonal notes.
 
Bar chart of U.S. median condo and co-op sales prices, January 2019–January 2024.

National house-price appreciation rates over various periods since 1990. 

Chart of national home price appreciation, with blue bars showing 5% since 2023 and 297% since 1990.
 
Home sales by price segment: Higher-price segments have recently seen by far the largest year-over-year increases in sales.
 
National home sales by price segment in January 2024, shown as a pie chart with price ranges and percentages.

Median house prices in selected U.S. metro areas. "Metro areas" typically consist of large, multi-county regions.
 
Table comparing 2023 median house sales prices across selected U.S. metro areas, with Atlanta-Marietta listed at $370,000.
 
And a look at the approximate income required to buy a median-priced house in various U.S. metro areas, based on a 20% downpayment. 

Bar chart comparing qualifying income to buy a median-priced home across U.S. metro areas in Q4 2023.
 
As the new year's market wakes up, the number of new listings is spiking, but, so far in 2024, not enough to meet the acceleration in buyer demand. Since mid-2022, listing activity has plummeted due to the mortgage lock-in effect, but many analysts predict higher listing volumes this year.

Chart of seasonal U.S. new listings, with December lows and May or June peaks; January 2024 listings rose 25% month over month.
 
Months-Supply-of-Inventory measures supply as compared to demand: The lower the MSI, the more heated and competitive the market. During the pandemic boom, soaring demand dropped MSI to historic lows; since mid-2022, the plunge in listings has been the main factor in keeping MSI so low by historical standards. 
 
Chart of U.S. housing inventory, peaking above 10 months in 2008 and falling to about two months during the pandemic boom.
 
January sales volume reflects the very slow market of December, but moving into spring, the monthly number of sales should begin rising quickly. Click on the image below for our overview report on market seasonality.
 
Chart of monthly U.S. home sales from 2020 to January 2024, with seasonal peaks and winter lows.
 
Strong demand vs. an inadequate supply of homes for sale, plus higher interest rates, have severely impacted housing affordability.
 
Chart of U.S. housing affordability from 1989 to 2023, with a sharp rise in payment burden during 2023.
 
FEMA evaluates social and economic risk against 18 different natural hazards, including floods, wildfires, earthquakes & hurricanes.  Click on the image below to review a series of FEMA's Risk Index maps.
 
FEMA map of U.S. county natural-hazard risk ratings, with the risk calculation and Compass attribution.
 
A limited illustration of Census data regarding U.S. population diversity. People have come and continue to arrive from every country across the globe - which is another significant factor in many regional housing markets.
 
U.S. population estimates by race and ancestry shown in a pie chart with detailed ancestry tables.
 
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