Still above 7%
Average 30-yr mortgage rates stayed above 7% for the third-straight week, and higher rates are already dampening transaction activity. After jumping 9.4% month-over-month in Dec 2023, pending sales (signed contracts) backtracked 4.9% MoM in January 2024. [National Association of Realtors] This suggests that existing home sales for February will drop below 4 million units (annualized) again.
How close is close enough?
The Fed’s target for inflation is 2% on the “core” PCE (Private Consumption Expenditures). At its peak in mid-2022, “core” PCE was running at 5.6% YoY. We’ve come a long way already. In January 2024, “core” PCE eased to 2.8% YoY (from 2.9% in Dec 2023). And if you annualized the last 8 months, we’re running at a 2.2% pace! [BEA] How close do we need to get to 2% before the Fed starts to cut rates?
Four crazy years
Now that we’ve got the Case-Shiller home price data for December 2023, we can zoom out and remind ourselves just how enormous the home price movements have been since the end of 2019. Over the last four years, Case-Shiller’s national home price index rose an incredible 47%. And over the last 35 years, the index climbed roughly 5% per year. Talk about a winning record! [S&P Global DJI]
Local Market Trends
| Area | Median Price | Active Listings | New Listings – 5 days | Median Days on Market |
|---|---|---|---|---|
| Scottsdale, AZ |
$1,100,000
0.1%
|
1988
0.4%
|
142 |
50
-0.2%
|
| Gilbert, AZ |
$676,500
0.1%
|
442
0.3%
|
65 |
29
-0.4%
|
| Phoenix, AZ |
$524,945
0%
|
2512
-0.1%
|
272 |
39
-0.3%
|
| Mesa, AZ |
$488,000
0.1%
|
914
0.1%
|
98 |
35
-0.3%
|
/) from Jan. to Mar. 2024.
