2024 is already off to a strong start for housing and real estate. Mortgage Rates calmed down from their furious 2023 and the Fed is set to make numerous rate cuts throughout the year. Also, a new solution has arisen in an attempt to close the gap between teachers averages wage and local housing costs of some well known municipalities. We’re only 1 week in and momentum is already here!
A new report came out the first week of January talking about the disparity between the average teachers’ pay and their ability to afford housing payments based on municipal home price averages. The conclusion…the average teacher wage falls WAY short of what’s needed to afford the average priced home in most of the nations top 100 cities. Of course, we also have to remember dual income where that’s present, but as the report asks: “How can we attract more teachers to areas where the housing is well beyond their monthly income and the rent might be too?” One school districts solution was to become a landlord themselves and we will have to see if others follow suit. Do you think this could be the way forward?
Also last week the November pending sales was released. Pending home sales in November were unchanged compared with October and 5.2% lower than November of last year, according to the National Association of Realtors. Remember, this is about number of homes sold – NOT PRICE OF HOMES SOLD. Mortgage Rates peaking near 8% in October and typical holiday lull are being blamed for the lack of increase in sales, but it also signals that we most likely really hit rock bottom for number of units sold during this current economic cycle. With mortgage rates sharply lower then they were in the fall of 2023, we’re likely to see pending home sales make a strong resurgence in the weeks and months to come.
And let’s take a moment to talk about how the housing market finished up 2023. For the final week of the year, Inventory ended up higher than it was for the final week of the previous year. There were more homes under contract than the previous year, there were no statistically significant price reductions to cause alarm that the bottom is about to fall out of home prices., and interest rates settled in WELL below where they were during the fall and ironically looked mostly similar to how they did to end 2022. All this adds up to a pretty confident looking housing market to kick off 2024 and WE’RE HERE FOR IT!
So with that, let’s take a quick look at what’s coming up in the markets this week. Several Fed members will be speaking this week, but since we got last weeks Fed meeting minutes released, I’m not expecting to hear much deviation from what we’ve come to learn about their plans for 2024…which is in short: numerous rate cuts and a buncha of arguments about when they will start and how many they will do.
Monday Tuesday and Wednesday are pretty light days in the market, and no notable news will released.
Thursday we will get a lot of CPI data: Core CPI Month over month, CPI month over month, CPI year over year and unemployment claims
Friday we will hear Core PPI month over month and PPI month over month
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