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The Federal Reserve's Open Market Committee (FOMC) met last week and decided to leave the fed funds rate unchanged, citing a strong economy and inflation that has failed to make any progress over the most recent couple of months. On the other hand, the most recent jobs data came in well below expectations at 175k, suggesting that the labor market cooling trend may have already started. With a weaker-than-expected jobs report and the Fed hinting that a rate hike is unlikely, mortgage rates ended this week at the lowest levels since early April, and provided hopes that rates may start to creep down as we approach the second half of the year.
Federal Reserve leaves rate unchanged as inflation progress stalls: The Federal Reserve kept the fed funds target range steady at 5.25% to 5.50% after its March FOMC meeting, due to lack of progress in inflation easing in recent months. The central bank also suggested, however, that it will likely hold rates at their current level longer rather than raise rates again. Fed chair Jerome Powell acknowledged that the inflation fight has experienced setback in the past few months but expected inflation to resume its declining trend later this year. At the conclusion of the meeting, the Committee also announced that it intends to slow the pace of quantitative tightening, the ongoing reduction of its $7.4 trillion asset portfolio, starting on June 1. By significantly curtailing the selling off of its assets, the Fed is hoping to keep normalizing the size of its balance sheet without creating money market stresses and putting too much upward pressure on interest rates.
Latest jobs report shows hiring slowdown: The employment situation in April came in softer than expected and started the second quarter with signs that the labor market could finally be cooling. Nonfarm payrolls added a seasonally adjusted 175k jobs in April, the slowest growth pace in six months, and was well below the consensus expectations of 240k gain. While last month’s jobs numbers were sharply below the upwardly revised 315k increase in March, they were in line with pre-pandemic levels and on par with the neutral rate of job growth to keep up with population growth. Meanwhile, the unemployment rate inched up to 3.9% last month from 3.8% in March and remained below 4% for the 27th consecutive month. Wage growth recorded its first sub-4% print in nearly three years with average hourly earnings rising 3.9% year-over-year, another signal that suggests a slowdown in the job market is forthcoming.
Residential construction spending slows across the board in March: Construction spending in the U.S. fell for the second time in three months, with total outlays declining on a month-to-month basis by 0.2% in March. While the overall spending continued to increase on a year-over-year basis by 9.6%, the monthly dip was a surprise as economists polled by Reuters projected a 0.3% gain for the month. A pullback in residential spending and a further slowdown in private nonresidential spending were the primary factors that weigh on the headline number. With the resurgence in mortgage rates in March, residential spending fell across the board with single-family, multifamily, and home improvement all declined month-over-month in March. Despite weaker total outlays in March, acute housing shortage and recent decline in mortgage rates should continue to provide support to home building activity, and spending on single-family constructions is expected to improve gradually in the second half of 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.
Hope everyone has a great Mother's Day weekend!
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525 E Seaside Way #1508
Long Beach 90802
2 Bed | 2 Bath | 1030 SF | $759,900
Enjoy breathtaking ocean views from the living room, bedrooms and the patio in this modern luxury 2 bed, 2 bath highrise condo. Walking distance to the beach, harbor, Shoreline Village, Terrace Theater, restaurants, nightlife, and so much more!
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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.
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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.
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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.
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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!
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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.
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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.
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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.
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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.
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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.
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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.
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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!
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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.
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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.
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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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