Here's an abridged summary of CAR's market data report:
March 4, 2024 – Recent economic reports suggest that inflation continues to cool from last year but may remain sticky in the short term. ... While it is widely expected that the Federal Reserve will not cut its policy rate in its upcoming meeting, mortgage rates could begin to trend down more meaningfully towards the end of the second quarter if the economy continues to slow.
Consumer confidence slips for the first time in three months: Consumers’ attitude towards the economy took a step back in February, as the Conference Board’s Consumer Index fell 4.2 points to 106.7 last month, declining for the first time since November of last year. ... Recent rising trend in interest rates could have affected how Americans feel about the economy as well, and concerns over the U.S. political environment may also have been a contributing factor to the decline in the optimism.
Mortgage rates remain elevated after key inflation data: The average 30-year fixed rate mortgage (FRM) reported by Freddie Mac for the week ending February 28 climbed again for the fourth consecutive week to the highest level since mid-December of last year. ... The Fed wants to see more evidence that inflation is slowing consistently and could wait until the second half of the year before making any rate cuts. Mortgage rates, as a result, could remain elevated at the start of the homebuying season.
Income edges up but inflation-adjusted spending dips: Americans were making more in January but may not be spending more after accounting for inflation. Personal income growth jumped 1% on a month-over-month basis and recorded the highest increase since July 2021. ... With the core PCE deflator notching its biggest monthly gain in 12 months, real consumer spending, in fact, declined 0.1%, the lowest since August of last year.
Construction spending unexpectedly falls in January: Construction spending in the U.S. started off the year slow with total outlays declining on a month-to-month basis by 0.2% in January, its first drop in 13 months. ... With vacancy rate likely to climb as more new apartments are expected to be released this year, multifamily construction should pull back further in the next 12 months.
Mortgage delinquency holds steady near historic lows: Mortgage delinquency inched up at the end of 2023 but remained near record low levels, according to a recent report from CoreLogic. Mortgage borrowers who were late in making their payments by at least 30 days or more accounted for 3.1% of all outstanding mortgages in December, an increase of 0.1 percentage point from 3.0% recorded in December 2022. ... With home prices projected to increase in 2024 and the economy likely to experience a mild growth this year, delinquency rate could rise but is not expected to increase sharply in the next 12 months.
Spring is coming and so is it time to seriously think about your real estate plans for this year?
Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996
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