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Recent data releases all point to an economy that remains more resilient than many feared, and a housing market that is showing signs of modest improvement. The second reading of GDP in Q4-2022 was revised down, but the economy still expanded at a decent clip. New home sales posted a solid gain in January and listing activity picked up in early February. However, the latest report on personal income & outlays suggests the Fed’s intervention is far from over. Real consumption jumped higher at the start of the year, adding pressure to inflation. With financial markets adjusting expectations as the Fed keeps rates higher and for longer, mortgage rates rose for the third consecutive week.
Mortgage applications retreat as rates continue trending upward: Despite the Fed trying to slow the economy in order to bring down inflation, the U.S. economy continues to show resilience. This is causing bond markets to reprice interest rates to account for the stronger than expected growth, tight labor markets, and the threat of sticky inflation. As a result, the 30-year fixed-rate mortgage (FRM) has been trending up for three consecutive weeks. Last week, the 30-year FRM averaged 6.50% - the highest since late November of last year. As a result, affordability will be affected, and some potential homebuyers have chosen to sit the sidelines as evidenced by a retreat in mortgage applications the last two weeks.
U.S. economy expands in fourth quarter, but at slower pace than previously estimated: The second estimate for Q4-2022 economic growth showed that gross domestic product (GDP) increased at an annualized rate of 2.7%. This was a downward revision to the initial 2.9% estimated last month and a deceleration from the 3.2% growth rate in Q3-2022. There were downward revisions to consumer spending, which had its weakest showing since the first quarter of 2022. Business spending also slowed as the economy lost momentum at the end of 2022. However, consumers boosted retail sales in January by the most in nearly two years, and employers added a surprisingly outsized number of new jobs. These signs of durability in the economy will likely force the Fed to continue raising rates to cool the economy and quell inflation.
U.S. new home sales jump to 10-month high despite weakness in broader market: New home sales increased for the fourth straight month in January and had their best performance since last March, when they jumped 7.2% to a 670,000 unit pace. December’s pace was upwardly revised to 625,000 units, and meant that January was the second consecutive month where sales activity topped 600,000 units. However, January’s gain was driven mostly by a strong uptick (17.1%) in sales in the South. Across the rest of the country, sales for newly built homes dropped. Overall, new home sales are still depressed as they remain behind last year by 19.4%. With mortgage rates trending up once again, home builders will be pressured to continue offering incentives, like rate buy-downs and price reductions, to entice buyers.
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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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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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 which totals a quarter acre. Amazing city and ocean views from Newport Beach on up 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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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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6490 E Saddle Dr
Long Beach 90815
3 Beds | 3 Baths | 2,845 SqFt | $1,789,900
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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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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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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