THE ADVANTAGE
Your monthly recap of the most important
mortgage-related news, perspective, and advice
May 2024
3 minute read
Most experts agree that there isn’t going to be much variation in the housing market for the remainder of 2024.
There are, however, reasons to stay optimistic about the market. Let’s take a look at the various factors impacting the current housing market.
High Home Prices
The median home sale price in the U.S. last month was $430,000, which is surprisingly the same as it was in April last year. This is due to an increase in the number of smaller homes being built. The median sale price has stayed the same, but the price per square foot has increased. This means buyers are getting less house for the same amount of money compared to last year.
High Interest Rates
The interest rate for a 30-year fixed mortgage has fluctuated between 6.6% and 7.2% throughout 2024. Combined with higher home prices, some homebuyers are unfortunately pushed out of the market, and need to either wait for prices—or rates—to fall in order to afford a home.
Wages and Inflation
While any given individual’s finances might not conform with this data, wages have actually been outperforming inflation, every month, since February 2023. Even still, many potential homeowners face obstacles saving for their down payment (which makes FHA loans more attractive, especially to younger homebuyers).
Increasing Inventory
Inventory of existing homes remains low, as homeowners who are locked into low interest rates are less likely to sell. New home construction, however, has been on the rise. The price of lumber has fallen nearly 20% since March, making it more advantageous for builders of new-home construction.
Mortgage Numbers Are Up Despite Economic Challenges
When you combine all of these factors together—high rates, high home prices, inflation, and low inventory—you would expect buyers to simply stop buying.
But the buyers are still coming.
Freddie Mac recently reported that purchase applications were up 3.2%, and overall mortgage activity was up 3.9% month-over-month (Feb-April 2024). NAR also reported that pending home sale data (PHS) was up 3.4% in March.
We’re still seeing that many applications coming from first-time homebuyers, and there’s a lot of potential with young buyers. Redfin reported that about 26.3% of Gen Zers between the ages of 19 and 25 owned a home in 2023. We recently discussed the best ways to market to Gen Z, and why credit unions are perfectly suited to meet their needs, especially given the challenges in the current market.
If you’d like to hear more about how MAM is helping credit unions meet their members’ mortgage needs, contact Jim Mitchell at (616) 466-7793 or [email protected].
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Who Is MAM?
Member Advantage Mortgage (MAM) is a Credit Union Service Organization (CUSO) that helps credit unions increase revenue by offering mortgage solutions to their members.
We achieve this by finding the mortgage solution that is in each individual member’s best financial interest.
What We Do
Since 2006, MAM has offered first and second mortgage origination and fulfillment services to credit unions. We also provide marketing tools (like our Mortgage Payment Calculator) to increase lead generation.
How We Can Help You
We’ll help you improve member satisfaction and deepen member relationships by offering or streamlining your mortgage delivery process. You’ll be able to serve current members so they don’t need to turn to the competition, all while increasing your mortgage revenue and generating non-interest income.
How You Can Learn More
This page goes into greater detail on exactly how we provide support and partner with credit unions.
You can also call Jim Mitchell, our Senior Vice President of Strategic Partnerships, to get answers to any questions about partnering with MAM.
Disclaimer:
This information is solely for credit union and mortgage professionals and should not be distributed or provided to consumers or the general public.
This is not an offer for extension of credit nor a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. Certain restrictions may apply. All approvals subject to underwriting guidelines. Not all applicants will qualify. Member Advantage Mortgage, LLC is an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.
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