Mortgage rates go up slightly to start off 2024
Despite the recent downward trend in rates, the latest purchase application index reported by Mortgage Bankers Association decreased 5% compared to two weeks ago, as supply constraints continued to hold back market activities.
Home purchase sentiment bounces back at year-end
While rates have been moving mostly sideway in the past couple of weeks, receding inflationary pressures coupled with the expectation of the Fed’s policy rate cuts will likely lead to more downward drifting in mortgage rates later this year.
Solid residential market pushes up construction spending in November
Builders are expected to pull back further in 2024 as the apartment supply pipeline remains saturated in the next 12 months.
December job gains top expectation
The latest jobs report, while more robust than the consensus expectation, continues to suggest that the labor market has cooled over the past year. As such, it is unlikely to have a change on the Fed’s rate movement perspective in the next FOMC meeting.
Holiday spending up modestly in 2023
This may imply that there could be a pullback in consumer spending in the months ahead as bills come due for those shoppers who borrowed forward at the end of last year.
The housing market should see a bounce back in activity in the coming months if the sentiment can maintain its upward momentum. The improvement, however, will likely be gradual as tight housing supply remains the norm in 2024.
SOURCE : California Association of Realtors