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The typical housing market outlook is filled with bold forecasts, safe bets and innumerable “crystal ball” calls.
One prediction you can take to the bank? Every forecast will be wrong, by a little or a lot.
Whatever shape the market’s recovery takes, industry observers — economists, investors and real estate professionals — will rely on a gradual stream of data to chart an ever-evolving path forward. Like outlook pieces, housing data is ubiquitous, and a handful of monthly reports and data releases offer the standard guideposts.
But for this report, Intel went beyond the standard data releases to come, keeping an eye out instead for significant data opportunities that will offer key pieces of the puzzle as the housing recovery unfolds in the months and years ahead.
What follows are 12 dates to circle on your calendar — and what they may tell us about the housing market’s comeback.
1. Blackstone earnings call
Mark the date: Jan. 25, 2024
Why make the first stop on the housing market’s comeback tour the first-quarter earnings call of the world’s largest commercial real estate owner?
Because Blackstone will provide even more context to its recent and massive reentry into the single-family home market.
One week earlier, the company announced its $3.5 billion acquisition of Tricon Residential, a Canadian real estate firm that has a $1 billion development pipeline of new single-family rental homes in the U.S., in addition to $2.5 billion of new apartments in Canada. Less than 18 months after one of its subsidiaries, Home Partners of America, stopped buying homes in about 40 of the 80 markets it played in, Blackstone hung a giant “open for business” sign by scooping up Tricon and its nearly 38,000 homes.
In Blackstone’s third-quarter earnings call for 2023, President and Chief Operating Officer Jon Gray foreshadowed this type of move while discussing supply-side pressures on apartment rents.
“Construction starts are falling sharply for virtually all types of real estate, including year-over-year declines of 30 percent to 70 percent for U.S. apartment buildings, warehouses and hotels,” Gray said. “And in the dislocated market, having $66 billion of dry powder in real estate is a significant advantage.”
Given its war chest and the size and diversity of its portfolio, Blackstone may be more of an exception than the rule in single-family investors. However, the company’s thoughts may include a number of insights that are broadly relevant to the single-family space.
2. Moxiworks Home Sales Predictor release
Mark the date: Feb. 22, 2024
MoxiWorks Home Sales Predictor for January and February / Courtesy MoxiWorks
Ali Rae Lundberg, lead data scientist for brokerage tech firm MoxiWorks, has this date circled on her calendar. She’s excited to see if recent model tweaks bring the MoxiWorks Home Sales Predictor as close to reality as she thinks it could be.
Lundberg and her team have learned several lessons since launching the predictor in October 2020, and she believes January and February estimates will be back within a 3 percent to 5 percent margin of error range. If that’s the case — the Home Sales Predictor says 285,000 agent-assisted sales will occur in January and 291,000 more in February — she said signs of a market beginning to return to normal will be evident.
“I feel really confident with that being the storyline,” said Lundberg.
When asked what number would give her cause for alarm when January’s numbers are confirmed, and it comes time to release February’s update, Lundberg said a number as low as 250,000 should be a red flag for recovery watchers.
3. Federal Open Market Committee meeting
Mark the date: March 19-20, 2024
All eyes are on the Federal Reserve this year — but not necessarily on its first meeting in January.
The March gathering of the Federal Open Market Committee has been more widely anticipated, as it could usher in the first interest rate cut in almost exactly four years and one of multiple reductions expected in 2024.
A development worth watching, though, is that Wall Street’s confidence in a March rate cut has faded. Entering the back half of January, the odds of Federal Reserve Chair Jerome Powell’s voting bloc cutting rates have dropped to a coin flip.
The size of the cut is also in question. Federal Reserve officials are viewed as unlikely to opt for anything like the 100-basis-point drop in March 2020. Instead, bond traders expect something like a 25-basis-point rate cut. Still, any confirmed movement could have a big impact on an industry eager for lower mortgage rates.
The Fed does not set residential mortgage rates directly. Short-term interest rate changes, however, produce a tightly correlated knock-on effect by influencing 10-year Treasury bonds. And these bonds historically track closely with the rates on mortgage products.
“The demand for housing will recover from falling mortgage rates and rising income,” National Association of Realtors Chief Economist Lawrence Yun said during the trade group’s annual year-end forecast summit.
Back to that blip. It’s possible the Fed, which has repeatedly said its decisions are guided by macroeconomic data, gets even more good news on inflation and makes that first cut in March after all. It’s also feasible that the Fed, seeing countervailing trends, decides that a higher-for-longer stance on interest rates may be necessary for at least two more months. That could mean a delay on a more substantive mortgage rate decline — and a blow to the spring and summer buying seasons.
4. A key Mortgage Bankers Association weekly application survey
Mark the date: April 17, 2024
The Mortgage Bankers Association surveys lending institutions 52 times a year to measure single-family loan application activity, including purchase and refinance submissions. So what’s so important about this week in particular?
- This report comes almost six months to the day from when the average 30-year fixed-rate mortgage rate hit a 23-year high at 8.03 percent. That’s according to Mortgage News Daily’s Rate Index, which had that same rate ending at 6.92 percent the week ending Jan. 19.
- While not a hard-and-fast rule, six months is a common refinance waiting period for a borrower’s current lender, cash-out loans, and FHA rate-and-term and streamline programs. In other words, this will be the first opportunity for many courageous rate-daters to cash in.
- While considerably lower than conventional rates, FHA rates also hit a three-decade high on Oct. 19 when they landed at 7.44 percent.
Second, closely related to March’s event to watch, is the purchase side of this data release. If the Fed does start its rate cut cycle in March, and the spread between the 10-year Treasury and 30-year fixed rate compresses more, the historically competitive spring buying season may well ramp up as pent-up demand releases.
If the Fed decides to wait until May, the impact will be visible in these data. Consider this from the Mortgage Bankers Association in April 2023:
“Last week’s increase in mortgage rates prompted a pullback in application activity,” Joel Kan, MBA’s vice president and deputy chief economist, said in the release. “With more first-time homebuyers in the market, we continue to see increased sensitivity to rate changes. The 30-year fixed rate increased 13 basis points to 6.43 percent, which led to purchase applications declining 10 percent.”
5. It’s the Fed — again
Mark the date: April 30-May 1, 2024
It may seem like cheating, but it really is that important. It cannot be overstated how important mortgage rate drops are to the housing recovery.
The psychological impact, to both industry professionals as well as buyers and sellers, of the Fed not cutting rates in March could be minimized if this meeting ends in a 25- or 50-basis point cut. If Powell’s team decides to punt again, though? That would be a poor sign for the housing recovery.
6. Check in on residential construction
Mark the date: June 26, 2024
There may be no better month to sell a home than May, according to an Attom 2023 analysis.
May has historically shown to be the best month to sell a home / Attom
The real estate data firm digested 12 years of home sales data in its annual report of the best days of the year to sell, and this is what it found:
- No month produced a larger seller premium than May, which reached 12.8 percent.
- There was a sizable dropoff from May to the next two best months to sell, with June’s premium at 10.7 percent and April’s 10.3 percent.
This U.S. Census Bureau’s release, comprising data from the Survey of Construction, will also be a good checkpoint to see how new construction’s recent advantage over existing homes is holding up. NAR confirmed on Jan. 19 that sales of existing homes plunged to a 30-year low in 2023. New single-family homes, benefiting from developer discounts and mortgage-rate buy downs, had a more stable year by comparison.
7. Inman Connect Las Vegas
Mark the date: July 30-Aug. 1, 2024
Self-serving? You betcha. Intel will never miss an opportunity to plug Inman’s outstanding Connect events, including this year’s annual convention in the desert. But there are a variety of reasons why this will be an event to watch to track the industry’s rebound.
The sessions will compile the latest data, trends and macro considerations. But just as important, this event offers networking opportunities that allow a real estate professional to get out of their regular bubble, network with other professionals and get a broader idea of what’s working — and what’s not — at the cutting edge of real estate.
If the convention floor is packed with exhibitors, the sessions are standing-room-only, and the Aria’s bars and restaurants are filled with a who’s who of residential real estate, it may be an early sign that the recovery is picking up steam.
8. Austin home prices: a canary or a phoenix?
Mark the date: Aug. 13, 2024
The Austin-Round Rock metropolitan housing market doesn’t need to be picked on any more than it already was in 2023. Nor does the performance of one metro area determine the fate of the national market.
But Austin is one of the most dramatic examples of a pandemic hotspot whose housing market has since crashed, sparking an inventory glut and home-value declines across the board. This data from NAR’s quarterly metro home prices report will show if the spring and summer bustle can arrest a freefall in Austin home prices that began one year earlier.
After closing out the second quarter with a median price tag of $579,998, there have been consecutive drops, with the preliminary Q4 from NAR showing $539,900. This represented a year-over-year gain, but it’s a drop compared to the price declines from Austin’s record high in mid-2022.
There are other reasons to watch this market. In the aforementioned forecast summit, NAR identified the 10 real estate markets it believed led all others in terms of pent-up housing demand. If they’re right and conditions break the right way, Austin could eventually lead the charge.
Source: NAR Real Estate Forecast Summit: The Year Ahead.
9. An Inman Intel Index milestone
Mark the date: Sept. 16, 2024
Insights from the Inman Intel Index survey of real estate professionals are published every month. But the results coming out in September will represent the 12th consecutive month of gathering real estate sentiment — and one of the first opportunities to track how industry sentiment has evolved over a longer period of time.
From the start, the Triple-I has asked recurring questions designed to understand how industry participants think today and what’s on their minds as they chart the course for the next 12 months. With a full year of results under Intel’s belt, several data points will help delineate the shape of 2024’s housing revival.
In the very first Triple-I, and generally growing from there, real estate agents and mortgage loan officers have expressed optimism that their buyer and seller pipelines would be heavier than they were. In a crushing year for home sales, it would be surprising if the majority of agents and loan officers didn’t coalesce around a more hopeful outlook.
For the sake of the people who’ve worked hard to get through the 2023 slog and make it out on the other end, here’s hoping that the answer to “How does your pipeline look today compared to 12 months ago?” is almost universally “Substantially heavier.” But perhaps more interesting, and telling of the depth of this turnaround, will be the forward-looking Q&A. If the 12-month outlook falls from optimism to uncertainty, that would be an early hint that that momentum is running out.
10. A telling Boston market occupancy report
Mark the date: Oct. 11, 2024
STR, a hospitality data firm and a subsidiary of CoStar Group, produces an analysis called the Forward STAR report that offers a snapshot-in-time view of forward market occupancy. With such data, one can tell how much a sizable convention the following month is shaping up in terms of attendance.
Enter the 2024 edition of NAR Nxt, The Realtor Experience, which is taking place in Boston. According to NAR, they expect somewhere in the vicinity of 15,000 attendees.
According to Jan Freitag, National Director of Hospitality Analytics for CoStar, the Forward STAR report will be fairly telling regarding anticipated attendance. An avid follower of all real estate markets, including residential, given its bleed-over with short-term rentals and design concepts, Freitag knew where the question was going.
“If attendance is lower than expected, you should see it in that report,” Freitag said.
11. A consequential U.S. election
Mark the date: Nov. 5, 2024
U.S. elections are always pivotal for business interests, and the outcome of this one could shape the direction of housing policy and regulation for years or decades to come.
Some point to the fact that home prices are up more than 20 percent since January 2021, when President Joe Biden took office, and assume that will drag him down. Others, like a big cohort of renters in the new Axios Vibes survey by The Harris Poll, are feeling more stressed by housing costs than ever.
Source: Axios
According to the survey:
- 37 percent of Americans rate their financial situation as poor.
- That increases to 43 percent for women and 47 percent for singles.
- For renters, the jump is massive: 57 percent believe they are in bad financial straits.
And the policies proposed during the campaign may be as important to monitor as the outcome.
Redfin chief economist Daryl Fairweather expects housing issues to take center stage during the general election.
In her own 2024 housing outlook, Fairweather said she expects both “President Biden and his opponents to make splashy housing policy proposals to try to lure voters who are unhappy with their economic prospects. Democrats are likely to focus on subsidizing down payments for first-time homebuyers, promoting inclusionary zoning, and funding housing vouchers, which are all popular with liberal voters.”
12. Matthew Gardner’s annual housing outlook
Keep an eye out: December
The final date to circle has yet to be formally scheduled, according to Matthew Gardner, the former chief economist at Windermere. But he hasn’t missed an opportunity to opine on next year’s housing market yet, so it’s worth keeping an eye out for his thoughts.
And yes, the last date to circle is one that is actually a prediction for 2025’s housing market. But for his past two outlook pieces, he’s led off with the fact that a housing price bubble was not in the process of unraveling, a prediction that has born out even amid declines in transaction volume. Intel asked him if he thought it would be three-for-three.
“Many have wondered whether mortgage rates rising significantly, or Fed policy changes, would lead to housing prices falling significantly like that seen during the housing collapse of 2007/2011,” Gardner wrote in an email. “I have repeatedly stated that I did not expect that to occur, and so far, my forecast has been accurate.”
He added: “But will the market see a downturn [in prices] this year or next? Again, I simply don’t see it.”
