The National Association of Realtors reported This Week in Real Estate a 3.1% increase in existing-home sales in January, marking a 5-month high. The median existing-home sales price rose by 5.1% compared to January 2023, setting a record for the month. This marks the seventh consecutive month of year-over-year price gains and the first time in 14 months that price growth has surpassed wage growth. The economy is surpassing expectations, leading the Conference Board to state that leading economic indicators no longer predict a recession in 2024. Below are a few newsworthy events from the third week of February that influence our business:EXISTING-HOME SALES ROSE 3.1% IN JANUARY. Existing-home sales grew in January, according to the National Association of REALTORS®. Total existing-home sales elevated 3.1% from December. Total housing inventory registered at the end of January was 1.01 million units, up 2.0% from December and 3.1% from one year ago (980,000). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023. The median existing-home price for all housing types in January was $379,100, an increase of 5.1% from one year ago ($360,800). “The median home price reached an all-time high for the month of January,” said NAR Chief Economist Lawrence Yun. Read the full story here.SOLID ECONOMIC DATA INDICATE A PROMISING OUTLOOK FOR HOUSING. The economy continues to post solid gains, leading the bond market to reverse earlier bets that the Federal Reserve would begin cutting the benchmark federal funds interest rate as early as March. Better-than-expected economic performance will reduce the rate of improvement for inflation data, meaning the Fed will need to maintain its long-stated monetary policy of higher rates for longer. Despite the recent uptick for interest rates, a combination of several key factors – including expectations that mortgage rates will continue to moderate in the coming months, the prospect of future rate cuts by the Federal Reserve later this year, and a protracted lack of existing inventory – provided a boost to builder sentiment for the third straight month. New data indicate that the long-run demand for home construction may be larger than many analysts expect. The Congressional Budget Office released new 30-year population growth projections that include substantial upward revisions. The latest estimates include an additional 8.9 million people in 2053, a 2.4% increase from its previous forecast. A faster growing population will undoubtedly increase demand for housing (including both for-sale and for-rent multifamily and single-family), creating added pressure on the persistently underbuilt housing market. Read the full story here.
CONFERENCE BOARD GIVES UP ON U.S. RECESSION CALL. The Conference Board on Tuesday abandoned a long-running call for the U.S. economy to fall into recession. The business research group’s index, meant to be a gauge of future economic activity, fell 0.4% in January to 102.7, the lowest level since April 2020 when the U.S. was in a brief recession after the onset of the COVID-19 pandemic and related shutdowns. It was the 23rd straight monthly decline, just one month short of the record-long slump that began in April 2007 and ran through March 2009 during the global financial crisis. The LEI’s six-month annualized rate of decline, however, has slowed sharply and the growth rate is around its least negative since August 2022. “While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators at the Conference Board. “As a result, the leading index currently does not signal recession ahead.” Read the full story here.
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