buyers wait for better rates The Federal Reserve’s “jumbo” rate cut did little to alter the trajectory of King County’s housing market in September. Continued sluggish sales and an increase in listings pushed months of inventory in the region to its highest level since September 2018.
single-family homes (MOI of 1.9), with significantly more slack in the townhome (3.3) and condo (4.6) segments. This disparity is a function of a notable imbalance in the supply and demand for housing in the region—while nearly 70% of sales in King Country through 2024 have been for single-family homes, only a little more than half of the region’s active listings have been single-family homes at any given time. Put another way, single-family home inventory was 24% below its prior 10-year average at the end of September, whereas condo and townhome inventories were 41% and 67% above, respectively. The Federal Reserve has two more interest rate decisions this year on November 7th and December 18th and, though further interest rate cuts are expected, it will take some time before this translates into more meaningful savings for buyers and more meaningful sales activity for King County.
The U.S. Federal Reserve opted for a larger-than-typical 50-basis-point interest rate cut on September 18th to officially commence the unwinding of what has been more than two years of exceptionally restrictive monetary policy. With inflation largely under control and strong evidence of a deteriorating labor market, Jerome Powell (the Chair of the Federal Reserve) had been signaling for weeks that the Bank would be cutting in September (you can read more on economic data that drove the decision here). How long it takes for this rate cut (and the flurry of additional cuts expected through the remainder of 2024 and into 2025) to translate into more meaningful savings for buyers remains to be seen. In the three weeks following the Fed’s decision, 15- and 30-year fixed mortgage rates have actually moved higher to 5.41% and 6.32% as of October 10th, respectively. Sure, this represents a roughly one percentage point drop from the annual highs seen
back in May, but mortgage rates remain considerably higher than pre-pandemic averages from 2010 to 2019. With little movement on borrowing costs, activity across King County in September remained well below typical levels, with 1,916 closed MLS sales coming in 35% below the prior 10-year September average (of 2,928 sales). On a year-to-date basis, the region’s 18,968 sales were down 25% relative to the prior 10-year average (of 25,347 sales). What’s more, continued soft sales came in tandem with strong new listings activity and inventory that grew to 4,727 active listings at the end of September (which is just 1.3% below the prior 10-year September average of 4,791 listings). That pushed months of inventory (MOI) in King County to 2.5, its highest level since September 2018 (MOI of 2.8).
Looking at individual home types, the region’s overall MOI was held down by
Information and statistics derived from Northwest Multiple Listing Service. Copyright © 2024 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of October 9, 2024. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E.
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