Author: Eric BernsteinPublished:
Q1 2024 is officially behind us and it went out with a fizzle. Last week was one of the calmest weeks (if not the calmest week) we've seen in 2024. Maybe thanks to people not wanting to ruin their long weekend or that it was a pretty light news week with no bumps of unexpected reporting.
The average rate for a 30-year fixed rate conventional loan dipped slightly to 6.73% (down from 6.77%). Make sure you're signed up for our weekly Friday rate texts. It could make the difference in your homebuying decision.
New Homes Sales Are A Bit Sluggish
New homes sales data for February came in last week and while numbers are up 5.9% year-over-year, they aren't at the level expected (662k actual vs 675k expected).
As noted last week, builders seem unbothered by this stat so far this year as permits are WAYYYY up and so are housing starts. I guess they've seen the movie classic "Field of Dreams" and are living by the motto "If you build it, they will come." With "they", being homebuyers - NOT the ghosts of baseball legends. No one wants to buy a haunted house.
A Housing Crash is Coming!!
The average rate for a 30-year fixed rate conventional loan dipped slightly to 6.73% (down from 6.77%). Make sure you're signed up for our weekly Friday rate texts. It could make the difference in your homebuying decision.
New Homes Sales Are A Bit Sluggish
New homes sales data for February came in last week and while numbers are up 5.9% year-over-year, they aren't at the level expected (662k actual vs 675k expected).
As noted last week, builders seem unbothered by this stat so far this year as permits are WAYYYY up and so are housing starts. I guess they've seen the movie classic "Field of Dreams" and are living by the motto "If you build it, they will come." With "they", being homebuyers - NOT the ghosts of baseball legends. No one wants to buy a haunted house.
A Housing Crash is Coming!!
Just kidding. In fact, we're seeing the opposite. The Case-Schiller home price index showed another record high was hit in January. Home prices are up 6.2% year-over-year! Which means a lot of people who utilized a 5% down payment to buy are up more than 100% on their money. Looks like buying during a high interest rate environment can be very profitable!
Of course, real estate is local so while 6.2% is the national average, some cities are up more or less. The important thing to note is that NOT ONE of the metro areas saw a year-over-year price decrease!
San Diego, Los Angeles and Detroit continued to lead the 20-city index, with respective annual gains of 11.2%, 8.6% and 8.2%. Eleven metros saw annual prices gains higher than the national 6% increase.
Buyers are coming back in the market!
Pending sales contracts are up month-over-month. The National Association of Realtors Pending Home Sales index climbed 1.6% to 75.6 last month. The growth comes after the index fell 4.9% to 74.3 in January. Meaning - we're not back to where we were at the end of 2023 - but we're getting close.
Now, after the rollercoaster ride interest rates took in March and all the fearmongering I saw when rates briefly went back up above 7% - I wouldn't be surprised if we saw another dip in March as buyers got skittish...
But you have to look at the bigger picture. Inventory is still way too low. Demand is still out there. Home prices are going up. Any individual who ACTUALLY wants to buy a home this year would be foolish to let headlines dissuade them.
Inflation Didn't Disappoint!
The Personal Consumption Expenditure Index report for February came in last week and the numbers didn't disappoint. They didn't wow either, but most importantly they didn't disappoint!
The personal consumption expenditures price index excluding food and energy increased 2.8% on a 12-month basis and was up 0.3% from a month ago, matching estimates. Core PCE (the arguably more important stat) was up 0.3% for the month and 2.5% at the 12-month rate, compared to estimates for 0.4% and 2.5%.
This is good news as the numbers came in exactly as expected. A report that came in under expectations would have been a disaster for homebuyers.
It's interesting that personal spending ticked up 0.8% month-over-month (more than the 0.5% expected), as consumers seem to be over their holiday hangovers. Overspending can be a direct cause of inflation so we need to trend carefully. We also know that consumers are going WAYYY over their skis when it comes to credit card debt so adding fuel to that fire may spell disaster.
In other news...
Fed President Austan Goolsbee gave some confidence to the mortgage rate market as he reiterated that 3 rate cuts are coming in 2024. In response to recent inflation news, he said "We're in an uncertain state, but it doesn't feel to me like we've changed fundamentally the story that we're getting back to target." That seems right to me. I believe that the road to 2% will be bumpy and we can't be deterred by 1 or 2 reports that don't come in as expected.
Key reporting dates this week:
Mon, 4/1: Construction spending
Tues, 4/2: Job openings
Wed, 4/3: ADP employment; Powell speaks
Thurs, 4/4: Initial jobless claims, Fed Presidents speaking
Fri, 4/5: U.S. unemployment rate; Consumer credit
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About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.