Asian family Happy Daughter pointing parents to look after her _ with child over house background.

Housing affordability continued to be an issue at the end of last year and will likely remain a challenge for many homebuyers in 2024. With rates expected to decline in the next 12 months, however, recent reports suggest that consumers are beginning to feel more positive about the current housing market conditions, and those on the sidelines could reenter the market if the economy remains healthy and rates continue their downward trend. Preliminary market data collected in the past few weeks also indicates that both sales and listings have been slowly improving since the end of 2023. If this market momentum continues, the California housing market could see an encouraging start for 2024.

 

Housing affordability remains at 16-year low in the fourth quarter of 2023: Housing affordability in California remained under pressure in the last quarter of 2023, with the statewide index for existing single-family homes remaining unchanged from the previous quarter at 15%. High prices, along with higher mortgage rates, pushed costs of borrowing up a notch at the end of 2023, ultimately keeping California affordability at the lowest level in 16 years for the second consecutive quarter. The monthly mortgage payment for a median-priced home (including taxes and insurance) inched up 0.7% from Q323 and jumped 11.2% from Q422, as the effective mortgage rate moved up 25 basis points (bps) quarter-to-quarter and increased 59 bps from a year ago to a 23-year high of 7.39% in Q423. A minimum annual income of $222,800 was required to make the monthly payment of $5,570 in the fourth quarter. With home prices expected to rise in 2024, affordability will remain low but could improve slightly if rates dip meaningfully in the next 12 months. 

 

Home purchase sentiment reaches highest level in nearly two years: Home Purchase Sentiment released by Fannie Mae rose again in January 2024, with the index increasing 3.5 points to 70.7 in the latest monthly read, the highest point since March 2022. The climb was due partly to the increase in consumer confidence in job security and partly due to the jump in the share of consumers who expected mortgage rates to decrease in the short term. Respondents expecting mortgage rates to go down in the next 12 months, in fact, reached an all-time high of 36% in January. Despite the optimism in rate movement, consumer perception on homebuying remained pessimistic, and the share who believed that it is a good time to buy stayed low at 17%, unchanged from the prior month. With affordability expected to improve slightly but remain low in coming quarters, home purchase sentiment could inch up in 2024 but the increase will be mild. 

 

Business leaders feeling more positive about the economy: CEO’s optimism about the current economic conditions has improved solidly at the beginning of the year compared to the previous quarter, according to the Conference Board Measure of CEO Confidence. The index surged to 53 in Q124 from 46 in Q423 and surpassed 50 for the first time since Q122. A reading of above 50 indicates that there were more positive than negative responses, a reflection of CEOs feeling more optimistic about their economic outlook. Nearly one-third (32%) of CEOs said that general economic conditions are better than they were six months ago, an increase from 18% reported in Q423. Close to two out of five (36%) in Q124 expected the economy to improve over the next six months, a jump from 19% in the prior quarter. When asked about the main U.S. challenge affecting their business this year, half of them cited “political uncertainty ahead of 2024 elections” as the greatest challenge. As for global challenges for their business in 2024, “the spread of existing wars” was cited the most at 46% by the respondents. There are economic opportunities in the year ahead as well, as “reduced inflation” (34%) and “the Fed interest rate cuts” (28%) were seen as the top U.S. developments that will benefit businesses this year. 

 

Short-term inflation expectations remain mostly stable: Consumers expectations on inflation a year from now were mostly unchanged in January, according to the latest New York Fed’s Survey of Consumer Expectations. At the one-year horizon, the median inflation expectation recorded a 3% in January, the same as what was reported in December 2023, but a sharp drop from 5% registered in January 2023. Two out of five (41.3%) of the respondents expected inflation to rise above 4% a year from now, while one out of four (24.5%) believed inflation should be between 2% to 4% in a year, and one out of three (34.1%) projected inflation to be below 2% a year out.

 

Construction spending gains momentum at the end of 2023: U.S. construction continued to expand as spending in December increased 0.9% month-over-month and jumped 13.9% year-over-year. Residential outlays played a big role in the overall gain, as construction spending in residential in the final month of the year went up 1.4% from the prior month and surged 6.8% from December 2022. With existing housing supply remaining tight and mortgage rates expected to trend down in the next 12 months, residential spending – single-family outlays in particular – should rise further as home builders continue to scale up production in 2024.

 

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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For Sale

5372 Kenilworth Dr.

Huntington Beach 92649

4 Bed | 5 Bath | 2,293 SF | $1,650,000

 

Discover the allure of coastal living, nestled in Huntington Beach's prestigious 92649 ZIP code, mere steps from the ocean. This exquisite residence boasts a prime location that merges seamless accessibility to the Brightwater Trail with the tranquility of the Bolsa Chica Ecological Reserve right in your backyard. 

14715 Bellflower Blvd.

Bellflower 90706

2 Bed | 1 Bath | 805 SF | $645,000

 

Welcome to your ideal starter home located in the heart of Bellflower! With its proximity to local amenities and welcoming neighborhood, this home is a must-see on your home-buying journey.

837 Chestnut Ave. #12

Long Beach 90813

1 Bed | 1 Bath | 611 SF | $320,000

 

Step into this wonderful top-floor unit boasting an open floor plan in a mid-century style building. This property presents a unique opportunity to own a fantastic rental or a charming coastal condo just moments away from the beach.

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2892 Walker Lee Dr.

Rossmoor 90720

5 Bed | 8 Bath | 6,041 SF | $15,000 / mo

 

Welcome home to perfection in this one-of-a-kind home in the highly sought after community of Rossmoor. Breathtaking elegance is evident upon arrival & deepens with the discovery of each exquisitely unique space, feature & divine amenity.  

12661 Martha Ann Dr.

Rossmoor 90720

4 Bed | 3.5 Bath | 2,221 SF | $6,500 / mo

 

Welcome Home - Located in the highly sought-after prestigious community of Rossmoor, Orange County. All elements throughout this 4 bedroom, 3.5 bath turn-key home come together to create a space that radiates contemporary style with modernist amenities.

In Escrow

8738 Belmont St.

Bellflower 90706

3 Bed | 2 Bath | 1,276 SF | $699,000

 

An incredible opportunity awaits with this charming 3-bed, 2-bath single family home. Set on a spacious 7,004 sq ft lot, that beckons with endless possibilities for entertaining or even possibly adding an ADU. 

 

3825 Linden Ave. 

Long Beach 90807

3 Bed | 2 Bath | 2,142 SF | $1,250,000

 

Charming 1933 Spanish Stucco with many original features. This single story home is situated on one of the prettiest streets, walking distance to to both Atlantic Avenue and Long Beach Blvd. 

2512 W Beachy Pl 

Anaheim 92804

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

 

Embrace the charm of this lovingly maintained single-story 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.

Recently Sold

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.

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(562) 900-9430

www.ImagineRealty.com

 

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