Economic and Real Estate Market Snapshot: Week Ending March 30, 2024

TL;DR:

This week, significant economic updates indicate solid U.S. economic growth and steady inflation rates, alongside a varied performance in the stock market. Mortgage rates saw a slight decrease, offering some relief to prospective homebuyers. Meanwhile, the real estate market reflects mixed signals with a downturn in national existing-home sales but a notable price surge in California, highlighting the state’s ongoing housing market dynamics.

Key Economic Indicators:

• U.S. Economic Growth: The last quarter of 2023 saw the economy expanding at an annual pace of 3.4%, revised up from an initial estimate of 3.2%.
• Inflation Measurement: The core Personal Consumption Expenditures (PCE) index, a key inflation gauge for the Federal Reserve, increased by 2.8% year-over-year, aligning with expectations.

Stock Markets Overview:

• Dow Jones Industrial Average: Closed at 39,807.37, up 0.8% for the week, marking a 5.6% increase year-to-date.
• S&P 500: Ended at 5,254.35, a 0.4% weekly increase, with a year-to-date gain of 10.2%.
• Nasdaq: Concluded at 16,379.46, a slight decrease of 0.3% from the previous week, yet up 9.1% year-to-date.

U.S. Treasury Bond Yields and Mortgage Rates:

• Treasury Yields: The 10-year bond yield dipped to 4.22%, with the 30-year bond yield closing at 4.39%.
• Mortgage Rates: According to Freddie Mac, the 30-year fixed mortgage rate decreased to 6.79% from 6.87%, and the 15-year fixed rate dropped to 6.11% from 6.21%.

Real Estate Market Data:

• U.S. Existing-Home Sales: February saw a seasonally adjusted annualized rate of 4.38 million units, a 3.3% decrease from the same month in 2023. Median home prices rose to $384,100, a 5.7% year-over-year increase, with a slight uptick in the supply of homes for sale.
• California Home Sales: In contrast, California experienced a significant increase in existing-home sales and prices. February’s sales rose 12.8% from January, with a year-over-year price jump of almost 10%, highlighting the state’s heated market despite a nationwide slowdown.

Featured News – Mortgage Rate Update:

• Freddie Mac Survey: Reveals a slight relief in mortgage rates, with the 30-year fixed rate now at 6.79%, and the 15-year fixed rate at 6.11%, potentially impacting buyer affordability and market activity positively.

Analysis:

The latest economic indicators suggest a robust U.S. economy with manageable inflation, providing a cautiously optimistic backdrop for financial markets. However, the real estate sector presents a mixed picture; while overall U.S. home sales have declined, California’s market remains buoyant, driven by strong demand and limited supply. The slight decrease in mortgage rates offers a glimmer of hope for prospective buyers, although affordability challenges persist, especially in high-demand areas like California. As the market heads into the second quarter of 2024, stakeholders will closely watch for shifts in economic policies, mortgage rates, and regional market trends that could influence the housing landscape.