What’s Up with Real Estate as of February 2, 2024?
What’s Up with Real Estate?
National news and local views for the week ending Friday, February 2, 2024
National Real Estate News
Fed holds rates steady
On Wednesday, the Fed kept short-term interest rates steady and said it was "unlikely" that they would begin cutting rates in March. But with "core" PCE inflation already approaching their 2% target, the risk of damaging the economy through unnecessarily high-interest rates is rising. Whether rate cuts start in March or May - they're coming soon...even if the job market remains tight.
But market expects cuts
Remember: the Fed doesn't set mortgage rates, the market does. And the market is always looking ahead, trying to "guess" where inflation and interest rates will go next. Despite Powell's rhetoric, the market expects a series of rate cuts to begin in May at the latest. This, together with somewhat weaker job numbers recently, has caused the average 30-year mortgage rate to drop back to near 6.6%.
Not a 'head fake' this time
Around this time last year, pending home sales skyrocketed in response to a sharp (but ultimately brief) fall in mortgage rates. But the 8% month-over-month jump in pending sales experienced last month is much more likely to be sustainable. Why? Because the Fed will be cutting (instead of raising) rates, and the inventory of homes available for sale is beginning to rise.
Local Market Trends
As of Friday, February 2, 2024
Real Estate is very market-specific and can vary from city, zip code, and even specific subdivisions. If you're curious about a specific area, send me a message so I can give you stats specific stats or refer you to an expert in that area!
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