Romance. Full length of beautiful young couple in casual clothing dancing and smiling while standing in the kitchen at home

Americans are feeling more confident about the housing market at the beginning of 2024 as buyers and sellers start seeing a glimpse of hope at the far end of the tunnel. While rates had a slight uptick the first 2 weeks of the year, easing inflationary pressure and a soft economic outlook prompted many to believe that mortgage rates will decline, albeit slowly, in the next 12 months. The housing market should see a bounce back in activity in the coming months if the sentiment can maintain its upward momentum. The improvement, however, will likely be gradual as tight housing supply remains the norm in 2024.

 

Mortgage rates go up slightly to start off 2024: After reaching a 7-month low in the last week of December, mortgage rates kicked off the year with a mild uptake in the first 2 weeks of 2024. The average 30-year fixed rate mortgage (FRM) reported by Mortgage News Daily inched up from 6.67% on the last trading day of 2023 to 6.72% at the closing on January 11, 2024. The boost in rates was due partly to more upbeat economic data and partly to the recent increase in traders’ doubts about the Fed’s rate cuts in the next 12 months. With the latest jobs report suggesting a stronger-than-expected labor market, rates could continue to see some volatility in the coming weeks. Mortgage demand, meanwhile, remained soft as mortgage applications dropped again at the end of last year. Despite the recent downward trend in rates, the latest purchase application index reported by Mortgage Bankers Association decreased 5% compared to two weeks ago, as supply constraints continued to hold back market activities.

 

Home purchase sentiment bounces back at year-end: With interest rates dropping to the lowest level in seven months, optimism about the housing market began to come back at the end of 2023. The home purchase sentiment index released by Fannie Mae jumped 2.9 points to 67.2 in December and reached the highest level since April 2022. The share of consumers who said that it is a good time to buy rose to 17%, an increase from the survey low of 14% recorded in the prior month. The surge in confidence last month was driven primarily by the increase in optimism that mortgage rates will soften, as a record-high 31% of the respondents believed that rates will decline over the next 12 months. While rates have been moving mostly sideway in the past couple of weeks, receding inflationary pressures coupled with the expectation of the Fed’s policy rate cuts will likely lead to more downward drifting in mortgage rates later this year.

 

Solid residential market pushes up construction spending in November: Despite a slowdown in new home sales pace in November, construction spending advanced again in November as single-family construction continued to provide support to new building activity. Total outlays for residential and non-residential posted a solid gain with an increase of 0.4% month-over-month in November and improved for the eleventh consecutive month. Residential spending was up 1.0% from October, with single-family outlays surging 2.9% as inventory remained low in the existing housing market. Multifamily outlays inched up 0.1% month-over-month in November but continued to moderate, as apartment demand remained on a normalizing trend. Builders are expected to pull back further in 2024 as the apartment supply pipeline remains saturated in the next 12 months.

 

December job gains top expectation: The December jobs report came in stronger than expected yet again, with employers adding a seasonally adjusted 216k jobs last month. Employers added a total of 2.7 million for the year 2023, a sharp decline from 4.8 million in 2022, but still a stronger number compared to the few years preceding the pandemic era. The unemployment rate was unchanged at 3.7% in December, but the labor force participation dipped an unusually large 0.3 points to 62.5%. A slip in the rate is a discouraging sign for the Fed officials, as fewer people being drawn into the labor force could put upward pressure on wages. Average hourly earnings, in fact, rose 4.1% year-over-year in December, a tick-up from 4.0% in November. The latest jobs report, while more robust than the consensus expectation, continues to suggest that the labor market has cooled over the past year. As such, it is unlikely to have a change on the Fed’s rate movement perspective in the next FOMC meeting.

 

If you have any questions or would like personalized advice regarding the current market conditions, please feel free to reach out. Your success in real estate is my top priority.

 

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2512 W Beachy Pl Long Beach 90815

3 Bed | 2 Bath | 1,695 SF | $875,000

 

Embrace the charm of this lovingly maintained single-story, single-family home, cherished by the same family for over 50 years. Nestled on an expansive 10,948 sq ft lot, this property beckons with endless possibilities – from adding an ADU, a pool, more living space, or just simply reveling in the serene, park-like ambiance.

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2174 Stanbridge Ave

Long Beach 90815

3 Bed | 2 Bath | 1,489 SF | $905,000

 

Nestled in coveted Los Altos... known for being pet & people friendly with awesome schools, parks, walkability & more! This immaculate & inviting 3 bedroom/2 bath home with its upgraded kitchen, baths, living room as well as spacious family room will go fast!

807 Delaware St

Huntington Beach 92648

4 Bed | 5 Bath | 3,237 SF | $2,605,000

 

Tesoro Builders has created another extraordinary opportunity to own a brand new, custom designed single-family home in the heart of highly coveted downtown Huntington Beach. The epitome luxury living offers an exceptional beach lifestyle.

5417 Bonfair Ave

Lakewood 90712

4 Bed | 2 Bath | 1,746 SF | $950,000

 

Welcome to this recently updated 4 bedroom, 2 bath two story home located in the heart of Lakewood.

251 Elm Ave. 

Long Beach 90802

2 Bed+Den | 3.5 Bath | 1,750 SF | $915,000

 

This exceptional modern townhome at The Huxton built in 2018 boasts 2 bedrooms, a den/great room, and 4 baths spanning 1,750 square feet. The large rooftop deck off the top-floor den/great room provides an exceptional indoor/outdoor living experience.

2059 W 160th St.

Torrance 90504

2 Bed | 1 Bath | 837 SF | $780,000

 

Discover Your Dream Home in North Torrance! This charming 2-bedroom home is nestled on a serene residential street, offering you a remarkable opportunity to own in this sought-after neighborhood with great schools.

781 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 2,067 SF | $1,225,000

 

Stunning 3-bed, 2-bath home with breathtaking ocean views in Coastal San Pedro. Experience the beauty of the ocean from the front yard, primary bedroom, and the expansive backyard.

773 W 30th St

San Pedro 90731

3 Bed | 2 Bath | 1,040 SF | $955,000

 

Enjoy beautiful ocean and harbor views from the front yard, living room, and the expansive backyard. This 3-bed, 2-bath home offers even more possibilities with an additional enclosed patio area currently staged as a family room and game room.

1007 Catalina Ave #108

Redondo Beach 90277

2 Bed | 2 Bath | 1,181 SF | $1,175,000

 

Welcome to Your Dream Beach Home! A Stunning 2 story, 2 bedroom, 2 bath condo located half a block to the beach. Beautifully updated throughout with dramatic high ceilings, gorgeous kitchen, and an abundance of natural light and open space.

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