The Market is Defying Odds and Maintaining its Momentum

In February, existing home sales rose 9.5%, marking the second consecutive month of growth and the largest monthly increase since February 2023, according to a report released This Week in Real Estate by the National Association of Realtors. The median home price reached a record high for any February on record. Builder confidence saw its fourth consecutive monthly gain in March, reaching its highest level since July 2023. Single-family housing starts rose by 11.6% month-over-month, the highest level since April 2022, and surged by 35.2% year-over-year. Single-family permits increased 1.0% month-over-month, marking the fourteenth consecutive month of growth, with a 29.5% rise year-over-year, according to data from the Commerce Department. Below are a few newsworthy events from the third week of March that influence our business:  
EXISTING HOME SALES SURGE TO ONE-YEAR HIGH IN FEBRUARY. Despite the rising mortgage rates witnessed in February, existing home sales continued to improve and climbed to a 12-month high, according to the National Association of Realtors However, low resale inventory and strong demand continued to drive up existing home prices, marking the eighth consecutive month of year-over-year median sales price increases. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 9.5% to a seasonally adjusted annual rate of 4.38 million in February. Homes stayed on the market for an average of 38 days in February, up from 36 days in January and 34 days in February 2023. The February median sales price of all existing homes was $384,500, up 5.7% from last year. This marked the highest recorded price for the month of February.  Existing home sales in February were mixed across the four major regions (as shown below). Sales in the Midwest, South, and West increased 8.4%, 9.8%, and 16.4% in February, while sales in the Northeast remained unchanged. Read the full story here.
US SINGLE-FAMILY HOUSING STARTS, PERMITS NEAR TWO-YEAR HIGHS. U.S. single-family homebuilding rebounded sharply in February, hitting the highest level in nearly two years. The report from the Commerce Department on Tuesday also showed permits for the future construction of single-family housing units rose to more than a 1-1/2-year high last month. Single-family housing starts, which account for the bulk of homebuilding, surged 11.6% to a seasonally adjusted annual rate of 1.129 million units last month, the Commerce Department’s Census Bureau said. That was the highest level since April 2022. Single-family building permits rose 1.0% to a rate of 1.031 million units in February, the highest level since May 2022. The completions rate for the single-family segment surged 20.2% to 1.072 million units, the highest level since November 2022. A survey from the National Association of Home Builders on Monday showed confidence among single-family home builders rose to an eight-month high in March amid optimism about sales now and over the coming six months. Read the full story here.
KEY TAKEAWAYS FROM THE FED’S RATE DECISION. The Federal Reserve held its key interest rate steady Wednesday for the fifth consecutive meeting, as the central bank awaits more data to determine when to cut rates. Fed officials also released a fresh set of economic projections Wednesday. They show that central bank officials now expect fewer rate cuts in the coming years than they estimated in December. A majority of Fed policymakers continue to expect three rate cuts this year, but they now see fewer in 2025 and 2026. Officials also reflected in their latest estimates that they expect “core” inflation to be higher this year than previously thought. US stocks broadly soared to new highs Wednesday, with the S&P 500 topping the 5,200 level for the first time ever, closing 0.9% higher. The blue-chip Dow also reached a new record, up 401 points, or 1%, at 39,511.34; and the tech-heavy Nasdaq hit 16,369.41, also a new high. America’s economy remains solid by many measures and in Powell’s own view. “The economy is strong, the labor market is strong, and inflation has come way down,” Federal Reserve Chair Powell said. Read the full story here.

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