Mortgage Rates Drop, Buyers Gain Leverage in Spring Market & Stocks Slide

Good morning, Dwellers! Welcome to another edition of Dwellings Digest, a realtor and investor driven newsletter simplifying real estate, exploring the economy-stock-real estate link, adding a fun twist with niche topics and more. Enjoy!

In today’s edition - Mortgage rates have fallen to 6.63%, giving homebuyers increased purchasing power as the spring housing market heats up. Inventory is on the rise, offering more options for buyers, while median list prices show minimal YoY change. Sellers may need to adjust strategies to stay competitive in a shifting market. As new real estate commission rules impact both buyers and sellers, negotiating agent fees and offering buyer incentives could be key to success this season. Stay informed to make smarter moves in today’s dynamic market.

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Mortgage & Stocks

Average going rates as of Mar 6 2025

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🏛️ Economic & Market Sentiment

Market Overview: March 6, 2025

Market Recap: Stocks Slide as Investors Assess Economic Data and Fed Policy

Stocks pulled back on Thursday as investors weighed economic data, Federal Reserve signals, and geopolitical uncertainties.

• The Dow Jones Industrial Average fell 523 points (-1.2%), while the S&P 500 declined 1.8% and the Nasdaq Composite dropped 2.3%.

• Market sentiment was dampened by renewed concerns over inflation, with fresh economic reports showing stubborn price pressures and slower job growth.

• The recent AI-driven rally faced a sharp reversal, with chip stocks like Nvidia (-3.5%) and Marvell Technology (-18%) leading declines.

Trade tensions also resurfaced, as tariff concerns between the U.S. and China rattled global markets. Meanwhile, the Federal Reserve's Beige Book suggested higher input costs could persist, reinforcing expectations for a cautious approach to interest rate cuts.

With a crucial jobs report due on Friday, investors remain on edge, watching for signs of economic resilience or further weakness that could shape Fed policy decisions.

Federal Reserve's February 2025 Stance:

In February 2025, the Federal Reserve maintained the federal funds rate at 4.25%–4.50%, continuing its cautious approach amid ongoing economic uncertainties.

Implications for Investors:

The market's recent volatility underscores the importance of staying informed about policy developments and their potential economic impacts. Diversifying portfolios and maintaining a long-term investment perspective remain prudent strategies in navigating such uncertain times.

🎢 Impact on Real Estate

Mortgage Rates Fall Again in Good News for Homebuyers as Spring Begins

Mortgage Rates Drop for 7th Straight Week as Market Uncertainty Grows | Homebuyers Gain Purchasing Power Amid Falling Rates

Key Takeaways:

• Mortgage Rates Drop Again: The 30-year fixed mortgage rate fell to 6.63% (from 6.76% last week), marking its largest weekly decline since September and a seven-week downward streak, per Freddie Mac.

• Housing Market Shifts: National median list prices dropped 0.3% YoY, extending a 40-week trend of price stagnation, while new listings rose for the 8th straight week, signaling more inventory for spring buyers.

• Inventory & Sales Trends: Total homes for sale surged 27.6% YoY, and homes are sitting on the market four days longer than last year, giving buyers more negotiating power as sellers become more flexible.

This trend suggests shifting market dynamics—lower rates are boosting affordability, but pricing pressure remains as inventory grows.

🎙️ RE Spotlight

Revealed: America’s Hottest Housing Markets—and Why Some Buyers Are Happily Paying Over Asking

• Hartford, CT Leads U.S. Housing Markets : With a 6.6% YoY price increase and homes selling in 38 days—nearly twice as fast as the national average—Hartford reclaimed the No.1 hottest market spot in February, per Realtor.com.

• New Jersey Sees Unprecedented Demand : Homes are selling above asking price within days, with some properties attracting 130+ buyers and 27 offers, as seen in Paramus, NJ, where a home sold for $125K over asking in just six days.

• Midwest & Northeast Dominate Housing Hotlist : For the 17th straight month, only these regions ranked in the Top 20 hottest markets, with Toledo, OH (+24.4%), Reading, PA (+10.6%), and Providence, RI (+7%) leading in price growth.

High demand, rising home values, and competitive bidding wars signal a hot spring housing market—especially for buyers targeting affordable and high-growth metros.

🏰 RE State Zone

This Surprising ‘Quiet Luxury’ Hot Spot Is No. 1 in the Nation for High-End Home Price Growth

• 150% Surge in Luxury Prices – Boise, ID, leads the nation in luxury home price appreciation, with high-end home prices skyrocketing 150% since 2017. The top-tier market now sees listings averaging nearly $1.3 million, outpacing major metros like NYC and LA.

• Wealth Migration Fuels Demand – An influx of affluent buyers—many from California—has reshaped Boise’s luxury landscape. Seeking a serene, nature-rich lifestyle, these buyers have turned the once-modest market into a premier destination for high-end real estate.

• Top Luxury Neighborhoods – Boise’s elite homebuyers are gravitating toward areas like Eagle ($1.1M median), Warm Springs Mesa ($1.2M), Highlands ($1.3M), and North End, where multimillion-dollar estates blend with historic charm and panoramic views.

🏕️ Niche-RE

Investor Home Purchases Decline Slightly Nationwide, Drop Significantly in Parts of Florida

1. Investor Purchases Decline: In Q4 2024, investor activity fell 3.9% year-over-year, marking the lowest level since 2016. This drop is largely due to high home prices, elevated mortgage rates, and economic uncertainty.

2. Florida Sees Largest Pullback: Florida metros, particularly Orlando (-27.5%), Miami (-21.3%), and West Palm Beach (-14.5%), experienced the steepest declines in investor activity. Rising natural disasters, soaring HOA fees, and insurance costs are negatively affecting the real estate market in these areas.

3. Decline in Condo Purchases: Investor purchases of condos in Q4 dropped 13% year-over-year, marking the lowest level in over a decade. The surge in HOA fees and increased frequency of natural disasters, especially in Florida, is pushing investors away from the condo market.

These trends reflect a more cautious investor market with the spotlight shifting from once-booming locations like Florida to more stable regions, such as Seattle and San Jose, where investor activity rose.

🖼️ Chart-Tastic

👾 Tips to Home Buyers & Sellers

Navigating the New Real Estate Commission Rules: What Buyers and Sellers Need to Know

The rules around how buyers' agents are paid have changed. Homebuyers are now directly responsible for negotiating their agent’s fee before home tours. Sellers can still offer incentives, but they need to understand how to price strategically under these new guidelines. Whether you're a buyer or seller, here’s what you need to know to make the best move in today’s market.

Tips for Homebuyers: Included

• Negotiate Agent Fees: Be proactive in discussing agent fees upfront and shop around for competitive rates.

• Weigh the Pros and Cons of an Agent: While skipping an agent may save money, it adds more responsibility to the buyer.

• Look for Seller Concessions: Buyers should request incentives like seller-paid commissions, especially in slower markets.

• Leverage Transparency: Take advantage of more open commission negotiations to demand better service or explore alternative fee structures.

Tips for Home Sellers: Included

• Offer to Pay the Buyer’s Agent: Attract more buyers by offering to cover the buyer’s agent commission.

• Price Strategically: Understand the impact of commission changes on your sale price and net profit.

• Negotiate Buyer Incentives: Consider offering buyer incentives like covering agent fees or closing costs if your home isn't attracting offers.

This shift brings transparency to the process, empowering both buyers and sellers to negotiate smarter and more effectively.

🌍 Dwelling of the Day

And…that's a wrap on this edition!

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