Higher inventory levels are boosting transaction volumes for both existing and new homes as the spring selling season gets going. This despite average 30-yr mortgage rates remaining over 7.5%. It’s a reminder that ‘life happens’ (the 6 D’s of real estate), and when you gotta move, you gotta move!

So here we are again

We will find out today (Friday), if the “sneak peek” at the PCE inflation data for March was accurate. With 10-year US Treasury bond yields having jumped nearly 1% in the last four months (to over 4.7%), it would not take much good news to cause a bond price rally. Expectations are for March “core” PCE to improve slightly, from +2.8% YoY in Feb –> +2.7% YoY in Mar.

Buyers gotta buy

Pending sales (signed contracts to purchase an existing home) rose 3.4% month-over-month in March 2024 [Source: NAR]. This despite average 30-yr mortgage rates hovering around 7% and record home prices in many areas. A larger number of homes for sale certainly helped (up roughly 20% year-over-year), but the real story is pent-up demand. Life happens, and when it’s time to move, it’s time to move.

Slowing economy, rising prices?

Real GDP grew at an annualized pace of 1.6% in Q1 2024, well below both Street expectations (2.5%) and the previous quarter’s growth (Q4 2023: 3.4%). A cooling economy should have been positive for the bond market, but instead bond prices got crushed, sending bond yields and mortgage rates higher. Why? Q1 2024 inflation – as measured by Private Consumption Expenditures – appeared to reaccelerate [Source: BEA]

Local Market Trends

As of Friday, April 26, 2024

Area	Median Price	Active Listings	New Listings – 5 days	Median Days on Market
Scottsdale, AZ	$1,150,000 0.2%	2012 0.1%	128	57 0%
Phoenix, AZ	$529,000 0%	2631 -0.2%	267	38 -0.1%
Gilbert, AZ	$686,245 0.1%	468 0.2%	64	30 -0.3%
Mesa, AZ	$512,500 0.2%	920 0%	95	34 -0.1%