Trending Toward A Buyer's Market: What October’s Numbers Reveal! [October 2024 Market Update]

October Market Stats

October Key Takeaways

🔵 - 'Months of supply' rose to 4.76 – this is an indication we are trending further towards a buyer's market.

😳 - Mortgage rates are back above 7% following the 0.50% Fed rate cut.

🤝 - Both pending sales and closings were higher in October, a welcomed sign for the demand-side of the market.

🏠 - Inventory is still up 16% compared to this time last year while the median sales price was up 1%.

October In-Depth Analysis

Supply-Side:

Let's kick things off with the supply-side of the market! The number of new listings in Davidson County added to Realtracs in October was 1,103. This was in line with the number of listings added in 2022 and 2023 – not much of a surprise there (See chart below).

For those of you who read my market updates religiously, first off – thank you!! I've never considered myself to be the best writer but I hope I'm able to distill the information in a way that is easy to understand.

Folks that have been following along this year already know that the supply-side of the market has looked fairly normal. The number of listings added since the beginning of the year is on pace to match 2022's number – just over 14,000 (See chart below).

Looking at the total inventory, we start to get a glimpse at the demand-side of the market. This is where things start to look a little different compared to 2022 and 2023.

In October, the number of homes on the market hit 3,539 – the highest number we've had all year, slightly beating out the previous month (See chart below).

In short, yes, inventory is growing, however, it is not at a pace that should sound any alarms.

Demand-Side:

More homes went under contract in October 2024 than in years past (See chart below). This was likely a result of buyers who came back to the market when interest rates dropped for all of about two weeks.

The demand side of the market actually looked decent during the month of October. Since June 2024, the number of closings each month has trailed the 2023 numbers. October was the first month where there was a slight increase in the number of closings compared to the year prior (See chart below).

In aggregate, we're still trailing both 2022 and 2023. It's not rocket science, demand has slowed down in response to high mortgage rates.

Supply vs Demand:

When my clients ask me whether it's a 'buyer's market' or 'seller's market' I always like to say that it's not as black or white as that. I like to think of it as a gradient.

Currently, I'd definitely say we're trending toward a stronger buyer's market, especially if mortgage rates continue to stay elevated.

A good way to answer the age-old 'buyer's market' vs 'seller's market' question quantitatively is to look at the months of supply.

Months of supply tells us how much inventory is out there given the current pace of demand.

High Months of Supply = Strong Buyer's Market

I've stressed this key stat in my market updates ever since it spiked in June – a month when months of supply is typically pretty low.

It's no surprise that months of supply increased in October and will likely continue to increase through the remainder of the year due to the seasonality of the real estate market (See chart below).

Average days on market stayed steady at 27 days (See chart below). This number isn't always the most accurate as agents routinely take listings off the market to "refresh" them thus resetting the days on market.

That said, I'm a true believer that homes should sell within 45 days no matter the market conditions. If it takes longer than 45 days to get an offer, it's time to reevaluate the list price or marketing approach.

Home Prices:

Despite the lackluster demand, home prices remain resilient. The median sales price in Davison County was $495,000 in October, up 1% from a year before.

The average home price on the other hand had its second month of large declines – down nearly 8% compared to October 2023 (See chart below).

Mortgage Rates:

Mortgage rates oh mortgage rates!

Just as things were looking up, we're right back to 7% interest rates again. We all know that the Fed agreed to a 0.50% rate cut in September. My last market update did a good job explaining why mortgage rates didn't drop despite the fed cut.

The average 30-year fixed rate mortgage as of November 4th was 7.05%. While it's lower than this time last year, we're still a long way from what I consider the Goldilocks Zone (under 6%).

Inflation is here to stay – possibly long-term. If that's the case, I wouldn't expect much lower mortgage rates anytime soon.

Affordability Check-In:

Even though rates are higher and prices rose slightly, October was still a win in my book for home affordability. The average monthly payment came in just under $2,500 per month assuming a 20% down payment.

Even better – October 2024 had the lowest October interest rates in two years...now that's scary!

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If you have any questions about the state of the market or the home buying/selling process, please feel free to contact us at contact@felixhomes.com or 615-354-5731.