Housing Market News for March 1st, 2024

This week’s financial and housing market news update

The Economy

• Recent economic indicators reveal a mixed bag of trends impacting the housing sector and consumer sentiment. In January, orders for durable goods experienced a notable decline, marking the sharpest drop in four years, indicating a slowdown in economic momentum at the year’s outset.
• Consumer confidence, which had been on an upward trajectory for three consecutive months, took a dip in February. Concerns surrounding the labor market and the outcome of the approaching presidential election likely contributed to this downturn.
• The Federal Reserve’s preferred inflation gauge, the PCE index, reported a pickup in prices for January, albeit the smallest annual increase observed in nearly three years.

Housing Market News

• Amidst this economic backdrop, the housing market has seen some noteworthy shifts. New home sales showed a modest increase in January, with single-family home sales rising by 1.5% from December and 1.8% year-over-year.
• However, pending home sales experienced a notable setback in January, marking the largest decline in five months. The National Association of Realtors attributes this weakness to the impact of rising mortgage rates.
• Higher interest rates also played a role in dampening mortgage application activity last week. Purchase applications saw a 5% decline, contributing to an overall 5.6% decrease in total applications.
  
• February’s new listings showed their biggest uptick in 3 years. Paired with recent buyer restraint, this is good news for homebuyers, as the result of these two forces will be increased inventory.

These developments underscore the dynamic nature of the housing market and the importance of staying informed for both prospective homebuyers and industry professionals alike, including real estate agents, lenders, developers, builders, and contractors.