Increased Home Demand and Historic Stock Prices
Mortgage rates are at their lowest level in over a month. While the drop was minimal, there has been a notable increase in buyer demand as buyers who have been waiting to make offers are seeing a window of opportunity. Average interest rates for 30-year conforming fixed-rate loans from January 2023 through December 2024 are shown below. Rates fluctuated significantly during this quarter, peaking at 7.8% on October 26, 2023, before gradually declining to 6.69% as of December 5, 2024, marking the lowest rate in a month. These variations reflect changes influenced by economic conditions, lending policies, and borrower profiles. Notably, interest rates surged in late 2023 and early 2024, followed by a decline beginning mid-2024, offering potential relief for buyers and homeowners looking to refinance.
Source: Compass Market Reports
Another driver of the increase in demand may be tied to the stock market (and Bitcoin) hitting new all-time highs each week. Stock portfolio performance is a major factor that contributes to home pricing increases and typically brings on more all-cash buyers. The graph below highlights a consistent long-term upward trajectory despite short-term fluctuations. Key moments include a dip during the COVID-19 pandemic in 2020, followed by a strong recovery. By the start of 2023 and 2024, the index showed significant growth, continuing its rise into late 2024. This steady climb reflects market resilience and investor confidence despite periods of economic uncertainty.
Source: Compass Market Reports