Rick Seese has 47 years experience working in real estate market, and each month, he shares the latest news and outlook for Lowell-area housing market.

October 2024 Edition

-Trying to Move Forward
-The Latest Area Market Statistics
-Monthly Summary — What Does All This Mean?

Trying to Move Forward

The U.S. economy is in a pivotal phase, navigating the challenges of cooling inflation while maintaining steady growth. As of this writing, recent inflation data shows a year-over-year increase of 3.2%, reflecting significant progress from the post-pandemic high of 9.2%, but still above the Federal Reserve’s (FED) target of 2%. Although inflation has eased considerably since its peak in 2022, its lingering effects continue to influence the FED’s monetary policy, which is impacting mortgage interest rates and the housing market.

Throughout 2023 and 2024, the FED has closely monitored interest rates, while supporting economic stability. As a result, mortgage rates have remained elevated, although the FED recently enacted the first of several planned rate cuts. These highly anticipated rate reductions are still dependent on how the Fed interprets inflation and other economic indicators in the coming months.

Higher mortgage rates and higher prices have affected the housing market. Home affordability has been tougher for first-time buyers to enter the market. Meanwhile, homeowners with low-interest mortgages are reluctant to sell and swap their 3% to 4% rates for the current 6% rates. This reluctance has led to reduced inventory, driving up prices in many regions despite the cooling demand. The latest data shows that while the number of home sales have decreased, prices remain stubbornly high—and in areas of limited inventory and higher demand, prices have continued to rise.

If the FED sees sustained progress in reducing inflation while maintaining economic growth, we can expect further interest rate cuts moving into 2025. Should the interest rate cutting trend continue, more homeowners may feel encouraged to sell, increasing housing inventory and contributing to a more balanced market, both nationally and in our local markets across West Michigan.

Below is a look at the latest market statistics for our focus area school districts.

We are comparing the current 12-Month Rolling Average Sale Prices with the final 2023 Average Sale Prices within our surrounding focus area school districts. All our focus areas have higher Average Sale Prices compared to 2023 ending prices, except Lakewood. All our focus areas have higher Average Sale Prices from last month. The largest Year-Over-Year Average Sale Price increases to date are Forest Hills (8.2%), Lowell (7.6%), Belding (7.2%), and Caledonia (3.3%). The Lowell School District average sale price has increased $35,068 so far in 2024.

Pending Sales are sales under contract with an accepted offer, but those transactions have not been finalized yet (closed).

Only Rockford experienced a year-over-year Pending Sales increase. Only Lowell had an increase of Pending Sales from last month, with all other focus areas registering decreases.

October 2024 Monthly Summary

What does this all mean?

With inflation slowly cooling, many economists anticipate that the FED will continue with additional interest rate reductions in November and/or December, which would bring some relief for more affordability moving into 2025. However, keep an eye on the inflation numbers and economic strength, as the FED will be cautious. Look for one more rate drop by January 1 and hopefully, another in January or February. If this forecast holds true, we should begin to see more activity from prospective home buyers, including first-time homebuyers. A third rate reduction may also provide a surge in refinancing applications, and a very active upcoming spring market with more inventory.

Rick Seese works with buyers and sellers of residential, commercial, and industrial real estate. He is an Associate Broker with Greenridge Realty, Inc. and has been licensed full-time for over 40 years. If you’re interested in reaching out to Rick for more information, or have a question for the monthly article, you can contact him via email ([email protected]), visit his website at www.rickseese.com or Facebook page or call/text him at 616-437-2576.