St. Louis Real Estate Market: Fall 2023 to Fall 2024 Overview 🏡🍂

As we move into Fall 2024, the St. Louis real estate market has experienced several notable shifts. From interest rates to housing inventory, here’s an in-depth look at the key statistics that shaped the market over the last year!

Interest Rates:
One of the most significant changes from Fall 2023 to Fall 2024 has been the recent drop in interest rates. In Fall 2023, the average mortgage interest rate in the St. Louis area hovered around 7.0% for a 30-year fixed-rate mortgage. However, as of Fall 2024, interest rates have started to decline, with the average now sitting at 6.4%. This decrease has begun to ease affordability concerns, drawing more buyers back into the market and providing some relief to those previously priced out by higher rates. We hope to see these numbers continue to decline as we near the end of 2024.

Home Prices:
Despite fluctuations in interest rates, home prices in the St. Louis metro area have seen a modest rise. In Fall 2023, the median home price in St. Louis was approximately $275,000. By Fall 2024, that number grew to around $285,000, reflecting a 3.6% year-over-year increase. While the growth is slower than in previous years, it shows that the market remains competitive, particularly for well-located and updated homes.

Housing Inventory:
Inventory continues to be one of the biggest challenges in the St. Louis real estate market. Throughout Fall 2023, the market experienced historically low inventory levels, with about 1.8 months of supply available. By Fall 2024, inventory improved slightly, sitting at around 2.2 months of supply. However, this remains well below the 5-6 months of supply needed for a balanced market. The shortage of available homes, coupled with high demand, has kept prices strong despite higher interest rates.

Buyer Demand:
Buyer demand remains steady, though there has been a noticeable shift in preferences. With interest rates decreasing, more buyers have returned to the market, reinvigorating demand, particularly among first-time homebuyers. Smaller homes and townhouses are still popular due to their affordability, but the lower rates are helping buyers expand their options. Investors, too, are showing renewed interest as borrowing costs decline.

New Construction:
New home construction has provided some relief to the inventory issue, though not enough to fully meet demand. From Fall 2023 to Fall 2024, new home starts in the St. Louis area increased by about 5%. Builders have focused on smaller, more affordable homes, which align with current buyer trends. However, construction costs remain elevated, contributing to higher prices for new builds.

Days on Market:
With interest rates now falling, homes in the St. Louis area are selling at a slightly faster pace. In Fall 2023, the average days on market (DOM) for homes was around 20 days. By Fall 2024, that figure had risen to about 28 days due to the earlier rate hikes but is now starting to trend downward as lower rates stimulate more buyer activity. Well-priced, move-in-ready homes continue to sell quickly.

Rent vs. Buy:
Due to rising interest rates and home prices in 2023, the rent vs. buy debate had intensified in St. Louis, but now, with rates dropping, buying has become a more attractive option for many. Rental demand remains strong, though, and as of Fall 2024, the average rent for a one-bedroom apartment in the St. Louis metro area is approximately $1,200, a 4% increase from Fall 2023. Some renters are now reconsidering buying, seeing the long-term benefits of homeownership with the improved mortgage environment.

The St. Louis real estate market from Fall 2023 to Fall 2024 has been marked by rising home prices, slight inventory improvements, and, most notably, falling interest rates. With mortgage rates now declining, more buyers are reentering the market, leading to renewed competition and activity. As we head into late 2024, the trajectory of interest rates will continue to play a key role in shaping the market’s future!

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Email: madison@stonebridgepropertiesstl.com

Phone: (314) 489-0104