The Commercial Real Estate Alpha Site

With mortgage rates back over 7% and home prices rising around the country, buyers have stopped coming to the table. 2023 was the housing market’s worst year for sales in almost three decades, and the trend has continued into 2024 with contract signings in April slumping to their lowest level in four years. The median home price rose 4.3% in May from the prior year, causing listings to pile up as buyers are getting priced out of the market.

Prospective buyers were hopeful for rate cuts earlier this year, but strong economic growth caused delays. While a cooler housing market is a normal symptom of ‘higher for longer’ monetary policy, the combination of high prices and high mortgage rates cannot last forever. As supply continues to supersede demand, prices will start to drop, and eventually rate cuts will trigger more sales across the country.