New Single-Family Listings & Contracts Surge Surpassing Any Week In 2023

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As anticipated, the Federal Reserve maintained the federal funds rate unchanged for the sixth consecutive meeting, having last adjusted it in July 2023. The Labor Department reported This Week in Real Estate fewer-than-expected job additions for April, the lowest in six months, while the unemployment rate ticked higher, contrary to predictions it would hold steady. The labor market report was good news for mortgage interest rates as they ended the week at their lowest levels since April 9th. Altos Research observed a weekly surge in both new single-family listings and contracts, surpassing any week in 2023. The week saw 93,000 new single-family listings, more than at any point in 2023, alongside 76,000 pending sales of single-family homes, exceeding weekly figures from the previous year. Additionally, the FHFA and Case-Shiller released their February Home Price Indices last week, revealing sustained growth. The Case-Shiller Index showed a 6.4% year-over-year rise, marking eight consecutive months of growth, while the FHFA Index recorded a 7.0% increase over the same period. Below are a few newsworthy events from the final days of April and first few days of May that influence our business:  
RATES END WEEK AT LOWEST LEVELS SINCE APRIL 9TH. It was an action-packed week for the housing and mortgage market. Wednesday’s Fed announcement was the highlight, but we also got several economic reports that caused rate volatility. Thankfully, it was mostly the good kind. Monday’s news from Treasury was fairly palatable and roughly in line with market expectations, which allowed rates to stay steady. Even better gains on Friday after the latest monthly jobs report came out weaker than expected. Job creation fell to its lowest level since October, and that’s in line with the lowest since covid lockdowns. Rates typically fall when the job count undershoots the forecast by that much and Friday was no exception. 10yr Treasury yields and mortgage rates ended the week at the lowest levels since April 9th.  Read the full story here.
HOME SELLERS ARE RETURNING TO THE MARKET. The weekly volume of new listings is now higher than at any time last year. It’s still April, so there could be as many as eight more weeks of seller growth in the spring housing market. In addition to a higher number of new listings, there were also more new contracts started this week than in any week in 2023.  There were 72,000 new single-family listings unsold this week, another 21,000 homes were newly listed and already under contract (what are known as immediate sales) for a total of 93,000 new sellers this week. That’s much more than at any point of 2023. You have to go back to July 2022 to find this much seller activity in a given week. Keep in mind that there are still 20% fewer sellers each week than there would have been in a “normal” year prior to the COVID-19 pandemic. There are 398,000 single-family homes under contract now – a few percentage points more on a year-over-year basis. There were 76,000 new contracts started this week for single-family homes in the U.S. That’s more than in any week for all of 2023. It’s strong growth – 9% more than the same week a year ago. Sales volume typically peaks at the end of June, so we likely have more growth to come in the spring market. And the weekly new pending sales count is already ahead of the best weeks posted last year.  Read the full story here.
US JOB GAINS FEWEST IN SIX MONTHS AS LABOR MARKET COOLS. U.S. job growth slowed more than expected in April and the increase in annual wages fell below 4.0% for the first time in nearly three years, but it is probably too early to expect that the Federal Reserve will start cutting interest rates before September as the labor market remains fairly tight. The Labor Department’s closely watched employment report on Friday also showed the unemployment rate rising to 3.9% from 3.8% in March amid increasing labor supply. Nonetheless, the jobless rate remained below 4% for the 27th straight month. Data this week showed job openings declining in March. Signs of labor market cooling raised optimism that the U.S. central bank could after all engineer a “soft-landing” for the economy and doused chatter of stagflation.  Financial markets boosted the odds of a September rate cut and saw the Fed reducing borrowing costs twice this year instead of only once before the data. Nonfarm payrolls increased by 175,000 jobs last month, the fewest in six months, the Labor Department’s Bureau of Labor Statistics said. Financial markets raised their bets of a September rate cut to about 78% from 63% before the data. The Fed on Wednesday left its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July. Read the full story here.

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