What’s Up with Real Estate?
National news and local views for the week ending Friday, December 15, 2023
National Real Estate News
Inflation ebbing
It doesn’t take an economist to see what’s going on: the rate of inflation peaked in mid-2022 and has declined steadily and significantly since then. November “headline” CPI (inflation for consumers) dropped to +3.1% year-over-year, and November “headline” PPI (inflation for businesses) fell to just 0.9% year-over-year.
The Fed’s forecasts
The Federal Reserve kept short-term interest rates steady for the 3rd-straight meeting. That was no surprise. But what WAS a surprise was the Fed members’ forecasts for where they think the Federal Funds Rate will be by the end of 2024. 15 out of the 19 members expect rate cuts of between 50 and 100 basis points (that’s 0.5%-1.0%) over the course of next year. The median forecast was for 75 bps in cuts!
Party time
The Fed’s pivot from ‘maybe more hikes’ to ‘cuts next year’ had the markets in ecstasy. The Dow and S&P 500 hit all-time records. The yield on the 10-yr US treasury dropped below 4%. And average 30-year mortgage rates fell to 6.6%. That’s a decrease of nearly 150 bps (1.5%) in just two months. This will certainly boost demand…but will it help supply? That’s the big question.
Local Market Trends
As of Friday, December 15, 2023
| Area | Median Price | Active Listings | New Listings – 5 days | Median Days on Market |
|---|---|---|---|---|
| Roseville, CA |
$627,803
-0.1%
|
158
-0.2%
|
8 |
83
1.4%
|
/) from Nov. to Dec. 2023.
