May 2024 Housing Market Update | Richmond, Virginia Real Estate

May 2024 Housing Market Update: Affordability, Mortgage Rates, and Local Trends

Welcome to the latest housing market update for May 2024! In this video, we delve into three crucial aspects shaping our real estate landscape: housing affordability, mortgage rates, and local market trends.

Housing Affordability:
As illustrated in our graphic, housing affordability has hit a 30-year low, leaving many Millennials and Gen Zers questioning their prospects for homeownership. The median monthly mortgage payment has nearly doubled in the last five years, prompting adjustments in home construction towards smaller, more affordable options.

Mortgage Rates:
Currently, the 30-year fixed mortgage rate stands at 7.09%, still below the 40-year average of 7.7%. The Federal Reserve's decision to maintain the target Federal funding rate aims to address persistent inflation, impacting mortgage rates. While experts anticipate a gradual decline in rates, the process may take longer than initially projected.

Local Housing Market:
Despite affordability challenges and high mortgage rates, our local housing market remains robust. In April, the median home price surged by 99.2% year-over-year, with properties spending a median of just 7 days on the market. Sellers continue to benefit, with homes fetching an average of 10.4% over asking price.

Implications and Tips:
For sellers, now is still an opportune time to list your property, capitalize on market forces, and consider alternative sales methods such as auctions. Homeowners hesitant to sell due to low mortgage rates can explore turning their properties into rental assets.

Buyers are encouraged to seize homeownership opportunities despite affordability concerns. With no immediate signs of price depreciation, waiting for a market correction may not be advisable. Additionally, resources like downpaymentresource.com offer valuable insights into available grants and down payment assistance programs.

Conclusion:
As we navigate the complexities of today's housing market, it's essential to stay informed and proactive. Whether you're buying or selling, understanding these dynamics can help you make informed decisions. If you have any questions or need further assistance, feel free to reach out. Thank you for tuning in, and I look forward to providing you with more updates next month!

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