January 2024 MBS Highway Housing Index

The recovery that commenced in December 2023 has been confirmed in January 2024, with a stronger-than-seasonal jump in home price trajectory and buyer activity levels. The nearly 150 bps (1.5%) drop in mortgage rates over the last few months of 2023, coupled with slightly higher inventory, has reenergized buyers.

National Data

The MBS Highway National Housing Index jumped to 42 in January 2024, from 34 in December 2023. This was the second straight month of improvement after six months of decline. In January 2023, the index stood at just 15.

While normal seasonality is playing a supporting role in the turnaround, the lead actor has been the sharp fall in mortgage rates in late-2023. In December 2023, the Buyer Activity sub-index responded first by jumping 7 points. In January 2024, it was the Home Price Direction sub-index that led the charge, climbing 11 points to 52. This is the first time that the Home Price Direction sub-index has been above 50 (net positive pricing trends) since August 2023. In January 2023, this sub-index was at 14.

After a big jump last month, the Buyer Activity sub-index continued its improvement, rising to 33 in January 2024, from 27 in December 2023. In January 2023, this sub-index was at 16. The almost 150 basis point (1.5%) drop in average 30-year mortgage rates over the last few months has clearly brought buyers (and some sellers) off the sidelines.

Regional Data

Many regions (especially the Midwest, Southwest and Northwest) saw further month-over-month improvements in their Buyer Activity sub-indexes. That said, winter’s grip and low inventory levels kept activity levels relatively subdued. It’s worth remembering, however, that activity levels in January 2024 are significantly higher than they were in January 2023.

The recovery was most notable in the Price Direction sub-indexes, with five out of seven regions now posting numbers at or above 50 (the Northeast region was highest at 65). The largest increases came from the Midwest (38 → 56) and Mid-Atlantic (44 → 57) regions.

“Our National Housing Index bottomed in November 2023, a month earlier than the previous year. The survey results for January 2024 verified that turnaround, with most of the regional Price Direction sub-indexes moving above 50. With average, 30-year mortgage rates already below 7%, and inflation abating, the outlook for 2024 is positive,” said Barry Habib, MBS Highway Founder and CEO.