December 20, 2024 Economic and Housing Market Update

December 20, 2024

• The Realtor.com® economics team video update gives you the relevant economic and real estate information you need to know each week every Friday to navigate the housing market as a homebuyer, home seller, or industry professional.
• For the week ending December 20, Realtor.com® Chief Economist Danielle Hale recaps what the latest Realtor.com Rental report tells us about shelter costs. Although market rents are not rising, they remain relatively high. This creates an affordability challenge for minimum wage workers that is particularly acute in New York, even after the scheduled January 1 increase.
• Mixed construction data reflect builder optimism and caution. Fortunately, single-family completions edged higher, creating more new supply for homebuyers.
• Danielle discusses how increased supply helped push existing home sales to a 6-month high and more recent weekly data from Realtor.com show that active listings continue to grow.
• Highlighting the impact of high prices on homeowner balance sheets, Danielle reveals what this means for net housing wealth.
• Markets got big news this week from the Fed which Danielle unpacks alongside this week’s mortgage rates. 
• Finally, Danielle covers findings from a recent Realtor.com study inspired by holiday visiting that found more extra or guest bedrooms than ever. 
• You’ll find all the details including full reports and our housing data for download at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates. And instagram @realtordotcomecon for graphics.
• This concludes the 2024 weekly video series. Check back in mid-January for the 2025 kickoff. Happy Holidays!

VIDEO TRANSCRIPT:

• I’m Danielle Hale, Chief Economist at Realtor.com®. And here’s what you need to know about the economy and housing market this week.
• Last week I discussed slowing shelter inflation, and the latest Realtor.com Rental report helps explain why. Market asking rents fell for a sixteenth month in November. Even after the declines, rents remain just 3.8% below their 2022 peak. 
• The latest report also shows minimum wage workers must put in extra hours to keep rent affordable in most markets. This trend is particularly acute in New York, where the minimum wage is set to increase on January 1.
• November construction data were mixed. Permitting activity generally remains high while actual starts eased, especially for multi-family. In good news for homebuyers, single-family completions continued to edge higher meaning more new supply.
• Homebuyers saw more existing home supply as well, helping to push existing home sales to a 6-month high pace of 4.15 million. The pickup in sales tipped the housing market back into seller’s market territory, but I expect balance to return as inventory continues to recover. 
• In fact, weekly data from Realtor.com show that active listings were up more than 23% in mid-December from the prior year and new listings growth also remains robust. 
• Listing prices have shown some weakness in contrast to home sales prices which have climbed higher. By either measure, home prices remain high keeping homeowners in solid financial shape. Home equity or housing wealth was $35 trillion in the third quarter, the second highest level recorded.
• The big economic news of the week came from the Fed meeting. The Fed cut its funds rate, as widely expected. However, in updated projections, statement language and Q&A in the post-meeting conference, Chair Powell reset market expectations for what’s ahead: namely fewer rate cuts and higher rates in 2025 and 2026.
• Mortgage rates picked up this week, and are likely to climb again as markets continue to digest the Fed’s updates. However, I still expect an eventual decline in 2025, as detailed in the Realtor.com 2025 Housing Forecast. 
• Finally, in light of holiday visiting, a recent Realtor.com study found more extra or guest bedrooms than ever. The story is due in part to larger homes, but also smaller households. Not surprisingly, lower-cost housing markets tend to have more extra bedrooms and high-cost markets have fewer.
• You can find all the details, including full reports and our housing data for download, at realtor.com/research.  You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.
• And an important note – this will be the last weekly update of 2024. I want to thank you for watching regularly. I wish you and yours a very happy holiday season, and I look forward to keeping you up to date on the housing market in 2025.

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