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Mortgage rates rose slightly this week as the latest macroeconomic report shows that the U.S. economy continued to grow moderately with inflation remaining sticky and declining slower than expected. Despite being in an environment where rates stay higher for longer, there are signs that suggest that housing consumers are gradually adjusting to the new normal. New home sales bouncing back strongly in March, for example, is an indication that homebuyers still want to buy if they can find a way to get back into the market.
Mortgage rates rise slightly: The Freddie Mac fixed rate for a 30-year mortgage rose 5 basis points this week to 7.22% upon still-strong economic data. This week marks the fifth consecutive week of increase, with mortgage rates reaching their highest level since late November. In Wednesday’s meeting, the FOMC voted to hold rates steady and Chair Powell emphasized, once again, that future rate decisions will be dependent on incoming inflation and employment data. This means that mortgage rates are not likely to ease significantly until incoming data suggests that inflation is convincingly en route to the Fed’s desired 2% level. Recent data reflects a surprisingly resilient economy, which means rate cuts expectations have pushed out further into the back half of the year.
New home sales have the strongest pace in six months: New home sales in the U.S. bounced back in March after a brief retreat in February, with the number of newly constructed single-family houses sold rising 8.8% month-over-month and surging 8.3% year-over-year. Last month’s sales were the strongest sales pace since September 2023. With interest rates back on a rising trend since mid-March, more homebuyers turned to the new home market as many builders were still offering price discounts, mortgage rate buy-downs, and other incentives to offset the eroding housing affordability conditions. Ample inventory in the new home market was another reason for the increase in sales of newly constructed homes. The supply of new homes continued to rise and reached the highest level since February 2021, with the count of housing units for sale climbing to 477,000 in March, an increase of 10.2% from the same month last year. The March inventory level is equivalent to a supply of 8.3 months and remains well above the historical average of 5.9 months. Meanwhile, prices for new homes in March inched up from February but declined from a year ago. The national median price dropped 1.9% year-over-year to $430,700.
Mortgage delinquency rate falls from a year ago: Mortgage delinquency at the national level dipped on a year-over-year basis for the first time in six months, according to the latest Loan Performance Insights released by CoreLogic. Mortgages that were late in payment by at least 30 days or more dropped 0.2 percentage points from 3.0% in February 2023 to 2.8% in February 2024. The share of mortgages that were past due for six months or more reached the lowest level in 15 years. Almost all stages of delinquency were at near record lows in February and only four states reported year-over-year increases in overall delinquency rates, while eight states remained unchanged from a year ago. With home prices expected to rise further in coming months and the U.S. likely to avoid an economic downturn this year, the mortgage delinquency rate should maintain its stability throughout the rest of the year.
US economic growth slows in the first quarter: The U.S. economy continued to grow in the first three months of the year but at a pace slower than expected. The first quarter Gross Domestic Product (GDP) increased from the previous quarter by an annualized rate of 1.6%, a sharp decline from Q4 2023’s 3.4%, and was the weakest pace of growth since Q2 2022. A sharp pullback in exports, a decrease in inventory investment in the private sector, and a slowdown in government spending all contributed to the softening in growth in economic activity. Consumer spending, while still gaining at a healthy pace, also slowed to 2.5% in Q1 2024 from 3.3% in the prior quarter. Despite the slowdown in economic growth, inflation in Q1 2024 remained stubbornly high. The Personal Consumption expenditure (PCE) Deflator - a key inflation gauge preferred by the Federal Reserve - increased 3.4% in Q1 2024, the biggest gain in a year. The pick-up in inflation indicated by the latest GDP report likely reaffirms the Fed’s decision to hold the rate-cut movement for a little longer.
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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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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