Market Update October 28th, 2024

The mortgage rate news has been unfavorable over the past week, with the typical 30-year fixed rate climbing to approximately 6.91% today from 6.68% last week. This increase brings rates back up to the levels observed in late July, marking a significant rise that could impact housing affordability and buyer activity in the coming weeks.

In the context of the Cromford Market Index (CMI), only four large cities are showing an increase over the past month. Notably, this group has seen a slight change since last week: Maricopa has dropped out and been replaced by Phoenix. The inclusion of Phoenix among the cities with rising CMIs is encouraging, as it accounts for roughly 25% of all real estate transactions in the area. Meanwhile, thirteen cities are experiencing a decrease in their CMI, suggesting a potential cooling in those local markets.

The average change in the CMI over the past month is -4.5%, a slight decline from last week's -4.0%. Paradise Valley stands out as the worst performer, suffering a significant 30% drop over the most recent month. This sharp decline indicates substantial market adjustments and could be a point of concern for investors and homeowners in that area.

Conversely, Tempe has been joined by Cave Creek in posting respectable percentage gains of 7% or more in their CMIs. The other cities with positive movements, represented by green dots, are Peoria and Phoenix. Excluding Paradise Valley, the largest declines continue to be concentrated in the Southwest region, particularly in Avondale, Goodyear, and Buckeye. These trends highlight the varied performance across different cities and underscore the complex dynamics of the current real estate market.

Rates jumped back up to 7% as of today, however, the lower rates the past month did not bring in as much demand as initially expected. Either the market will continue to stay like this for the foreseeable future, or some people holding back until after the election. 

“I hit big or I miss big. I like to live as big as I can.”
—Babe Ruth

Have a great week everyone!