Housing Market Trends and Economic News Update: January 17, 2025

Housing market news plus economic developments blogpost masthead with a simple chart showing rates have moved down this week

Starter Homes Scarcer Than Ever: In 2023, only 9% of newly built homes in the U.S. were under 1,400 square feet, a sharp contrast to 1982, when 40% of new builds met the “starter home” criteria.
Builder Sentiment Gains Momentum: January saw an uptick in builder optimism, driven by expectations of industry growth and eased regulations. However, concerns linger over tariffs, construction costs, and fluctuating mortgage rates.
Mortgage Demand Increases Despite Higher Rates: Mortgage applications rose 7% year-over-year last week, demonstrating strong demand. While inventory is improving, elevated home prices continue to challenge affordability for many buyers.

Inflation Remains Under Control: In December, both wholesale and consumer inflation increased less than anticipated, fueling speculation that the Federal Reserve will continue lowering its policy rates this year.
Retail Sales Show Economic Resilience: Although December retail sales came in slightly below projections, the numbers indicate the economy ended the year with steady growth.
Jobless Claims Edge Higher: While new unemployment claims rose more than forecasted last week, they remain at levels that reflect a strong and healthy job market.

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