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While the Fed’s hawkish interest rate policy was expected to slow the economy and inflation, recent data continues to suggest otherwise. The labor market remains tight and is still not showing signs of deterioration with new weekly jobless claims remaining under 200,000 for the seventh consecutive week. In the housing market, builders continued to scale back on new development, with residential investment in single-family homes down 1.7% in January. Moreover, with the average rate for a 30-year fixed mortgage rising 52 bps since the end of January, mortgage purchase applications fell to a 28-year low this past week. As demand remains soft, home prices are expected to soften as well, which will help improve affordability.
Mortgage loan activity declines as rates hit 4-month high: According to the Mortgage Bankers Association (MBA), total mortgage loan application volume as of February 24, decreased 5.7% form the week prior. This was the third consecutive weekly decline in mortgage loan activity after a brief resurgence in January when rates hit their lowest level since November 2022. However, rates have inched up more than 50 basis points over the past month as sustained economic growth and continued inflation reduce the possibility of the Fed loosening up its monetary policy anytime soon. With rates topping a 4-month high and nearing 7%, refinance activity has shrunk significantly and purchase applications have fallen to a 28-year low as potential homebuyers once again retreat to the sidelines.
Construction spending weakens, decline in residential overshadows nonresidential gain: Total construction spending remains above last year by 5.7%, though it continues to slow down as it fell 0.1% from December. Despite the nonresidential sector advancing 0.3%, total construction spending continues to be dragged down by a much weaker residential sector, which dipped 0.6% during the month and marked its eight consecutive decline. Residential spending is running 3.8% behind the same month of last year, mostly as a result of a 1.7% decline in single-family construction spending – offsetting growth in multifamily (0.4%) and home improvement (0.3%) spending. Compared to a year ago, spending on single-family construction was 18.4% lower and is consistent with a pull back on new home building as rising interest rates cool the housing market.
Jobless claims remain historically low, pointing to a still strong labor market: The number of Americans filling new claims for unemployment benefits fell again last week as they dropped 2,000 to a seasonally adjusted 190,000 for the week ending February 25. It was the seventh straight week that claims remained below 200,000 pointing to a strong labor market that continues to show minimal signs of deterioration despite efforts by the Fed to cool the economy, loosen the labor market and tame inflation.
If you would like to discuss today's market and whether now is a good time for you to buy or sell, give me a call at (562) 900-9430.
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7887 Lampson Ave #54
Garden Grove 92841
2 Beds | 2 Baths | 800 SqFt | $110,000
Beautifully updated 2 bedroom, 2 bath home in Garden Terrace Estates..
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2217 Westwind Way
Signal Hill 90755
4 Beds | 4 Baths | 3,516 SqFt | $2,695,000
Stunning panoramic views from this custom hilltop home, nestled at the end of the cul-de-sac on a double corner lot. Amazing city and ocean views from Newport Beach to the skyscrapers of downtown LA.
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5221 E Patterson St.,
Long Beach 90815
4 Beds | 2 Baths | 1,627 SqFt | $860,000
Wonderful home in the Stratford Square area of Long Beach. Lovely neighborhood known for its award winning schools.
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100 W. Louise St.
Long Beach 90805
3 Beds | 2 Baths | 1,031 SqFt | $500,000
Great opportunity to own this 3 bedroom, 2 bath single family home on a corner lot. Bring your imagination as this fixer has so much potential.
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5250 E. Lomita Ave.,
Orange 92869
32,924 SqFt of Residential Land | $650,000
Located on a private street with custom homes, this 32,924 SqFt lot comes with plans for a 5000+ SqFt custom home featuring amazing views.
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635 E Bonds St.,
Carson 90745
3 Beds | 2 Baths | 1,406 SqFt | $650,000
Great opportunity to own this 2 story 3 bedroom, 2 bath home with updated kitchen.
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199 Prospect Ave
Long Beach 90803
5 Beds | 3 Baths | 2,557 SqFt | $1,895,000
Stunning 4 bedroom, 2 bathroom Belmont Heights Tudor with a nicely-sized Guest Quarters/Rental Unit/Home Office above the 2-car garage! This beautiful home offers 2,086 sq. ft. of living space and architectural details that add to its charm and character.
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2204 Conquista Ave.,
Long Beach 90815
4 Beds | 3 Baths | 2,629 SqFt | $1,099,000
Beautifully upgraded 4 bedroom, 3 bathroom home in the highly desirable Los Altos area of Long Beach. This spacious two-story pool home is perfect for entertaining.
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64 Corona Ave.,
Long Beach 90803
3 Beds | 3 Baths | 1,532 SqFt | $1,498,000
Amazing single-story bungalow on an oversized lot located less than a block to the ocean in the heart of Belmont Shore!
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6490 E Saddle Dr
Long Beach 90815
3 Beds | 3 Baths | 2,845 SqFt | $1,720,000
Presenting this Amazing turnkey opportunity to live in Bixby Hill's 24 hr gated community. An entertainers paradise with your own oversized pool w/ beautiful waterfall.
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17141 Harvest Ave.,
Cerritos 90703
5 Beds | 3 Baths | 2,739 SqFt | $1,275,000
Welcome Home! Located in the highly sought-after area of Cerritos, this impeccable two-story home occupies is move-in ready
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5763 Eckleson St.,
Lakewood 90713
3 Beds | 2 Baths | 1,694 SqFt | $831,000
Beautifully updated 3 bedroom, 2 bath home in the heart of Lakewood on a tree lined street only minutes from great parks, schools, and nearby freeways.
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1215 Ohio Ave #2A,
Long Beach 90804
2 Beds | 2 Baths | 898 SqFt | $453,500
Nicely updated 2 bedroom, 2 bath,
2 story townhome style condo with a private garage.
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