Despite decreasing mortgage rates and a Significant increase in the number of House of sale in the country fny May is Now forecasting that us home sales will Drop to a 29-year low in 2024 also based on my nerdy analysis This would mean that this year we would Have approximately 1 million fewer home Sales than the longer average going back To the year of 1989 I have a lot to share in today's Video including Fanny May's latest Housing market forecast for home sales Home prices mortgage rates and much much More if you guys get any value out Today's video then please H like button Also consider subscribing as well um Really appreciate you guys supporting The YouTube channel and um let's begin Because I have a lot to share in today's Video so here's that report from fenny May their latest housing market forecast It says despite a significant decrease In rates and improved Supply in other Words more homes for sale in some parts Of the country I would say many parts of The country existing home sales are not Expected to pick up um through the Remainder of this year with the annual Pace now forecasted to be the slowest Pace since 1995 which is absolutely mind-blowing we Had tens of millions more people and of Course a lot of houses right now um
Compared to 1995 but despite that we're Going to have the fewest number of home Sales in about 29 years before I dive more into their Latest housing market forecast I want to Share this with you guys uh this is a Chart or a file I put together several Years ago based on historical Trends Looking at home sales according to the National Association rors and I want to Share this because um this is my own Analysis of how low these numbers are so Their forecast this year is that we're Going to be at 462,000 Existing home sales um this year so that Excludes multi family units of course Excludes brand new um home sales as well That would be a small decrease down by0 7% compared to last year by that time we Had just over 4 million sales and that Was the lowest level since 1995 so a small decrease on top of an Already very low amount of home sales on Top of that looking at their forecast at 4, 62,000 that' be a Down by about 24% Compared to 2019 and 2018 here's Something you guys should also be aware Of their forecast this year is also a Fairly significant downward revision Because their previous month posted back In August this year was calling for 4,1 129,000 home sales now it's at just Under 4 . 1 million that would not only
Be lower than last year's levels at 4.09 Million that was nearly a three decade Low but it would also be the fewest Amount of home sales since the year of 1995 in other words a 29y year low so Just under 4.1 million you have to go All the way back until the year 1995 when that time we had just over 3.8 Million sales this also represents Around 1 million fewer sales compared to The longer an average going back to the Year of 1989 we should have around 5 million Sales on average but this year they're Basically calling for about 1 million Less than historical averages let's talk About the big picture here so the US Population and the number of houses we Had back in 1995 much different compared To what we're seeing today right so Compared to the 1990s this would be a Very big decrease in sales so for Example according to the US Census buau There's around 50 million more people Living in the country right now compared To the year of 2000 so a lot more houses Right now and of course tens of millions More people live in the United States But we're basically have the same number Of close transactions as 1995 Potentially this year here's the impact Of the housing market if we have a low Level of transactions being had a low Level of um sales that puts upward
Pressure on inventory levels however new Listings is another big contributor so For example if new listings decrease That puts downward pressure on hous Inventory levels and a um really easy Analogy looking at you know how does um Inventory impact sales and also uh new Listings is a btub so think of a bathtub The water level there is the amount of House of for sale or inventory levels The it or the water going into the Bathtub is a measure of new lisings Going into inventory right and of course The drain um causing the water level Decrease is home sales so if home sales Get plugged up in other words we Decrease to basically way a 29-year low In sales uh that would cause a low Amount of water decreasing out the Bathtub in other words put upper Pressure on inventory levels in contrast If new Supply in the market or the water Going into the bathtub fills up greatly That also causes the inventory levels or The water level to rise as well so this Is kind of this balance between supply And demand which impacts inventory on a National level one more thing I do want To mention regarding you know a low Level of Supply uh this doesn't really Impact so much the housing market unless We start this uh in dynamic in which Let's just say a scenario in which um Supply um starts increasing greatly
Because sales are at very low levels so The drain of the bathtub being plugged Up but if new Supply hits the market at Great levels of course inventory is Going to pile up right um and of course The Market's different in every area of The United States so there's that but Something I was thinking about the other Day as well is that the housing market Is a big contributor to overall GDP of Course our economy our US economy think Of all the people get paid based on a Sales transaction or home sale Transaction you think of you know Driving around looking at house for sale You pay for gas which of course you go To the gas station pay for gas to fill Up your car or electricity if you have An EV vehicle but um think of all the Things that or all the people that get Paid when you buy a house let's just say You place an offer you get your offer Accepted then you have to get all your Inspections done right you can get your Home inspector pest inspector sewer line Chimney mold um pool Etc all those People get paid on top of that once you Your transaction usually there's two Sales um uh Brokers involved in the Transaction of course agents as well so The broker gets paid they pay all their Admin on top of that they pay the agent That represent the seller or the buyer In addition the uh if the buyer gets a
Loan they have a loan officer who gets Paid all their admin gets paid as well Once the sale is finalize as well then Once a buyer moves in you hire a mover You might get furniture you might update Your house before you list it for sale Etc etc there's so much money tied into A home sale and the home buying process That it's a big contributor to the US Economy so I'm curious to see if we Continue to see this low level of Transactions how could that uh impact Our economy as a whole uh but what do You guys think U please leave me comment Below regarding that all right since We're talking about the forecast um this Year let's talk about the forecast next Year into 2025 so they're calling for for uh 4505 million sales in 2025 that actually would be a slight Upper revision from the previous Forecast in contrast I didn't mention This um at 4, 62,000 that is a slight Downward vision from the 4,1 129,000 That was posted or forecasted one month Ago so in contrast for next year they're Calling for a slight upper revision Compared to their previous for for which They were calling for just under 4.5 Million sales now they're at just over That at 4505 million if we actually do get that Number this would be a three-year high
But around 500,000 fewer compared to the Longer an average at just over 5 million Sales if you guys are curious how uh This forecast for this year compares to Zillow and ALS course my forecast as Well Zillow which announced this about One week ago they're calling for 4.1 Million sales this year so running up or Basically running this up to 4.1 million Sales so Fanny May and Zillow are Basically in line with around 4.1 Million uh this year my forecast which I Announced a couple of months ago is Calling for just under 4 million sales I Would imagine of course I could be wrong Because I'm not a real estate market Fortune teller we're going to be around 3.97 million is my best all right Getting back to fenny May's latest real Estate market predictions they say here Recent data including softness in Pending home sales and purchase mortgage Applications continue to suggest that Limited home purchase demand at current Affordability levels so in other words They're saying here that we have a lack Of housing affordability we're seeing Future indications of close home sales At low levels that's based on Penning Home sales and of course application Numbers to buy houses using loans let's Talk a little bit more regarding this Because I did not make a video regarding Um NS or the National Association rers
Pending home sale index which is Basically a way to measure contracts Being signed between buyers and sellers Of existing houses excluding brand new Houses so for the month of August this Was posted about one week ago uh the Index um actually increased by 6% but here's something you guys should Be aware of though back in July the Index was only 70.2 that was the lowest Levels since 2001 when they started Tracking this data so the lowest level On record uh regarding a measure of Contracts being signed between buyers And sellers or pending home sales which Is by the way seasonly adjusted so a Small gain of 6% up to 70.6 this means this is the second Lowest reading on record again for data That goes back to 2001 in other words Lower than 2008 in regards to Application numbers take a look at this Because here's a one-year chart looking At the uh mortgage purchase index which Is a measure of applications according To the MBA as you can see here I mean Application numbers have basically been Flat all year this is a one-year chart Very very flat all year in contrast look At this five-year chart 5year chart the Index was 348 now we're down to About
146 so the index is basically half that Right now compared to the same time Frame or just say back in January of 20121 looking at the 10-year chart I Mean we're at very low levels way below Preco back in preco the index was around 230 to about uh just under 300 Um from late 2019 through basically late 2016 so big Picture because we have a lack of um Pining home sales of course a low level Of um application numbers to buy houses This all implies we're going to see a Low level of Clos home sales in the Coming months as well going back to Fenny May it says existing home sales Have not grown despite a nearly 20% Increase in the amount of houses for Sale that number by the way varies quite A bit looking at data from redin I Believe we're up by about 16% Year-over-year but realtorcom um has Announced and on top of also that um Altos research so Altos and also Realtorcom um are reporting gains of Around 30% on a national level compared To 12 months ago uh but we all can agree We have more homes for sale in most Parts of the United States compared to 12 months ago but despite this we're Seeing a low level of transactions so Far it says here much of this increase Of house inventory has occurred in the Sun Belt and Mountain West regions um
Areas that have also experienced the Strongest home price growth over the Past several years as well as robust new Home construction this creates um both a Large relative affordability shock in These states and greater competition for Existing home sales stemming from new Home construction so looking at Inventory numbers we have to account for The fact that we have um some areas have A lot of new building going on therefore Looking at you know inventory levels Looking at the resale Market or existing Houses areas that have a lot of new home Construction for sale um is also Impacting those markets as well and According to Doug Duncan who's Fanny May's um senior vice president and chief Economist he says home SEL activity Particularly on the existing side Excluding brand new home construction Remains near what we consider to be the Floor of basic demographic and household Mortgage demand so home buying demand Basically at a floor the lowest levels We should expect um right now in other Words it's so low it's hard to imagine The numbers getting lower because we're Basically at you know a a three decky Low in sales right now which is Absolutely astonishing all right guys if You guys are still watching today's Video then please hit the like button Really appreciate that but also want to
Share a summary for you guys as well um Here's a chart um according to Fanny May So let's look at um housing starts for Single family houses so let's look at 2024 so they're calling for housing Starts of single family houses to Increase by 4.8% compared to 2023 this is basically the beginning Phase of the construction of building a Brand new house a small increase Compared to the 5.7% decrease we saw last year then to Reverse in 2025 which is kind of Interesting to decrease down by. 4% Compared to 2024 in other words home builders are Not building houses like crazy like we Saw in what 2003 through 2005 6ish um so right now Builders are kind or based on their Forecast they're calling for um housing Starts to barely increase this year than To decrease next year now we already Talked about um sales of existing houses Let's look at new home construction this Is pretty crazy here 2023 brand new single family houses Increased by 3.9% compared to 22 the resale Market Tanked down by nearly 19% here's a Forecast so new homes up by 2.2% the resale Market down by 7% then It reverses though because they're
Calling for 11% gain in 2025 for Existing houses then to increase by a Small amount only up by 3.3% for new home construction in 2025 All right changing gears slightly here To talk about the forecast for home Prices based on their HPI which is their Home price index so they're calling for This year to increase by 6 1% compared to 2023 then next year a small gain up by 3% compared to 2024 the let's just call it the peak of The market looking at quarter to quarter Was actually q1 this year up by 7.3% compared to q1 of 2023 then to decrease through Q4 of 2025 Now I'm saying decrease but it's still Increasing based on the forecast so the End the year uh Q4 next year up by 3% Compared to Q4 of 2024 so they're basically calling for Half the gains in Q4 next year compared To the levels we could be seeing this Year for Q4 as well and by the way a 3% Gain is more or less in line with Historical Norms um home values Increasing approximately the same rate As inflation numbers at around 3% that Is actually a little bit normal looking At the long run average now let's talk About their forecast for rates so the Peak was actually in Q4 last year at 7.3 now they're calling for to end the
Year we're going to be down to 6.2% then to decrease each and every Quarter so by the time we hit uh Q4 of 2025 we're going to be at around 5.7% also for the year as a whole last Year we're at 6.8 then to decrease to 6.6% this year then next year to be 5.9% On average for the entire year this of Course means this actually happens that We're going to be at around 1% point Less at the end of 2025 compared to 2023 which is what I'm guessing why they Are expecting to see sales increase by 10.9% In 2025 potentially due to the fact that Rates are decreasing by about 1% Point Compared to 2023 and on top of that home Prices increasing by only 3% compared to The 6% increases uh we're seen uh this Year of course last year as well they Also provide their forecast for mortgage Uh originations this is based on Purchases plus refinances and by the way These figures right here are in billions Of dollar So looking at single family uh this is Kind of something that caught my Attention this is Q4 of this year so Q4 2024 they're calling for $138 billion Worth of Refi uh this year this is basically uh Three times the rate we saw in Q4 of 2023 at only 54 billion so to increase
From 54 billion to 13 8 billion in Q4 This year so heads up for any uh Mortgage advisers who are are watching Today's video they forecasting for refi Is basically triple uh compared to one Year ago also if you bought a home um in Around the last year and a half you Likely have rates or a rate much more Than the rates we're seeing today the Daily rate according to the mortgage News daily as of today which is on September 30th is around 6.2% So if you bought a home for let's just Say more than 7% you might want to reach Out to your uh local mortgage advisor to Kind of talk about if it's worth it to Do a refi or not um if you are located In California Oregon uh Texas uh and Also in Florida as well you can reach Out to us as well I'm only licensed in California as a licensed loan officer uh But revest and of course Jim Black which Is the founder of reest homes who has Been a on the channel uh several times Times he's licensed in multiple States So I'll provide a link in the video Description below if you guys want to Contact us um and talk about your real Estate goals regarding that with that Said I appreciate you guys so much for Watching today's video please like And Subscribe and we'll see you in the next Video have an amazing day [Music]
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