driver celebrate victory pass the finishing point and Race car racing on a track with motion blur.

We remain in a paradoxical environment where the ongoing strength of the U.S. economy raises concerns for the housing market. Strong jobs numbers last week were followed by equally strong inflation numbers this week, and then retail spending numbers exacerbated concerns that any rate cuts from the Fed would not come until the second half of the year, if at all. As a result, the bond market has sent interest rates climbing as investor demand for treasuries declines. The 10-year note has now surpassed 4.5% for the first time in nearly 6 months and mortgage rates have followed them north of 7% again. The outlook has not changed dramatically, but we expect more speed bumps in the coming months as the markets digest the latest data.

 

Inflation Moves Wrong Way, Scares Bond Market: The latest inflation data topped expectations for the third month in a row, with the March headline Consumer Price Index (CPI) registering an increase of 0.4% month-over-month and an increase of 3.5% year-over-year. Economists generally expected last month’s index to climb 0.3% and 3.4%, respectively. Energy and shelter costs continued to represent the driving force fueling a solid increase in the headline CPI number. The Core CPI – inflation excluding food and energy – recorded a year-over-year growth of 3.8% in March, a touch higher than the estimated 3.7% projected by the consensus. With consumer price inflation remaining sticky in the latest report, the Federal Reserve will likely stay put in their upcoming meeting in May. The economy should ease starting at the end of the second quarter and we still expect the central bank to cut rates before the end of the year.

 

Mortgage Rates React to Stronger-Than-Expected Economic Data: Higher-than-expected inflation caused a severe reaction in the bond market last week as 10-year Treasury rates jumped above 4.5% for the first time since November as the odds of a Fed rate cut before the end of the second quarter drop. As a result, mortgage rates jumped up as well with the average 30-year fixed-rate mortgage being quoted at 7.44% in the latest daily numbers. The recent rise in rates has weighed on closed and pending sales, which lost some momentum in March after rising solidly in February. However, longer-term rates have been catching up to where short-term rates have been for some time, leaving the yield curve less inverted now than it has been since rates began rising sharply in 2023. This suggests that a “soft landing” that avoids and economic recession is more likely now than was perceived last year.

 

Housing Inventory Thaws, But Supply Still an Issue: Even with the jump in rates and consequent impact on purchasing power for potential homebuyers, housing supply remains the largest obstacle to more home sales. Fortunately, the inventory shortage has begun to thaw very slightly of late. New listings have been growing on a year-to-year basis providing more options to buyers that are finally beginning to replenish closed transactions each month. However, the number of homes reaching the market are still too few to prevent rising competition as we enter the Spring Homebuying season. The median number of days a home takes to enter into escrow has fallen into the teens in recent weeks and nearly half of all the transactions are closing above list price once again. Home sales are expected to moderate in response to this more recent jump in interest rates, but the strong economic data and low levels of unemployment continue to put pressure on a housing market that is near historic lows for supply.

 

Big Spending Report Shows Undaunted Consumers: Although savings rates continue to fall and credit card balances and delinquencies are rising, consumer spending continues to be a significant driver of economic growth. Just like the latest jobs numbers, household spending came in much better than expected. Consumption represents nearly 70% of the U.S. economy and ongoing strength in the household sector in the form of very low unemployment with rising wages and income has translated into overperforming GDP for the past few quarters when many had expected to see the spending boom slow. Many growth forecasts for the first quarter are now being revised upward, which is likely to be viewed as a negative in the bond market because it will be seen as a reason the Federal Reserve will use to delay any rate cuts.

 

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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Coming Soon

3022 Bostonian Dr. 

Rossmoor 90720

4 Bed | 3 Bath | 2,612 SF | $1,700,000

 

Welcome Home - Updated Kempton model home featuring 4 bed, 3 baths in Rossmoor. Located within walking distance to parks and shopping. Just a short drive to the Seal Beach pier. Great schools in the award winning Los Alamitos school district. 

For Sale

700 E Ocean Blvd #607

Long Beach 90802

1 Bed | 1.5 Bath | 880 SF | $625,000

 

Amazing ocean views in this beautifully remodeled open floor plan condo at the iconic International Tower! This beautifully updated modern high-rise condo features hardwood flooring, fresh interior paint, scraped ceilings, and is light and bright with expansive ocean views. 

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.

In Escrow

6544 Cerritos Ave.

Long Beach 90805

2 Bed | 1 Bath | 1,198 SF | $699,000

 

Welcome to 6544 Cerritos Ave, a charming slice of Spanish-inspired architecture nestled in the heart of North Long Beach. This classic 2-bedroom, 1-bathroom home boasts timeless elegance coupled with modern upgrades, offering comfort and style.

1985 San Francisco Ave. 

Long Beach 90806

3 Bed | 2 Bath | 1,509 SF | $1,020,000

 

This historic gem awaits you in the charming Wrigley neighborhood of Long Beach! This gorgeous Spanish home, built in 1928, is full of charming curb appeal with its gated courtyard, porte cochere, red-tiled roof and front steps leading to the turret entry!

Recently Sold

16136 Cornuta Ave. #117 

Bellflower 90706

3 Bed | 2.5 Bath | 1336 SF | $590,000

 

Beautifully remodeled townhome with newly updated kitchen, baths, flooring, lighting, etc. Private 2 car attached garage. 

14715 Bellflower Blvd. 

Bellflower 90706

2 Bed | 1 Bath | 805 SF | $655,000

 

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. 

8738 Belmont St.

Bellflower 90706

3 Bed | 2 Bath | 1,276 SF | $720,000

 

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. 

8230 Santa InezBuena Park 90602

4 Bed | 2 Bath | 1,194 SF | $625,000

 

Beautifully remodeled end unit townhouse in Buena Park! 4 bedrooms, 2 baths with open floor plan, modern kitchen, and private backyard. 

3825 Linden Ave. 

Long Beach 90807

3 Bed | 2 Bath | 2,142 SF | $1,350,000

 

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.

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.

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Tim Majka

(562) 900-9430

www.ImagineRealty.com

 

DRE #01399855