Weekly Housing Trends Summary

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Easing Inflation Boosts Odds of Two Fed Rate Cuts This Year link

• The Consumer Price Index (CPI) fell by 0.1% in June, lowering the year-over-year inflation rate to 3.0%. While energy prices fell for the second consecutive month, there were notable increases in shelter and motor vehicle insurance costs.

• Core inflation, which excludes food and energy prices, rose by 0.1% for the month and 3.3% over the past year, below expectations of 0.2% and 3.4%, respectively. This was the lowest annual increase in three years.

• June’s CPI reading likely will embolden the Fed to lower interest rates, beginning with a 25-basis-point cut in September and another in December.

• Falling inflation will be a tailwind to real estate investment activity, setting the stage for a recovery later this year.

Weekly Housing Trends View—Data for Week Ending July 6, 2024 link

• The median listing price fell by 1.1% year-over-year after nine weeks of stable or rising prices. This drop might be a temporary shift due to the Independence Day holiday, suggesting potential short-term volatility.

• New home listings decreased by 4.9% compared to the previous year, influenced by the holiday. This marks a break after 13 consecutive weeks of rising listings, reflecting seasonal variations.

• Active inventory increased by 34.5% from the previous year, continuing an eight-month trend of growth. Despite this, the number of available homes remains significantly lower than pre-pandemic levels, keeping market pressure high.

Student Housing Rent Growth Softens as Pre-Leasing Chugs On in June link

• Pre-leasing rates for Fall 2024 are at 84.5%, slightly down from 85.8% the previous year and 86.2% in June 2022. Despite the decrease, pre-leasing momentum saw a notable 6% increase from May to June 2024.

• Properties farthest from campus have the highest pre-lease occupancy at over 85%, while those within a half-mile to one mile have the lowest at 84%. Proximity to campus significantly impacts pre-leasing occupancy rates.

• Annual effective rent growth is at 4.4% in June, the lowest this season. Properties more than a mile from campus show the strongest rent growth, nearing 6%, indicating distance influences rent trends.

Mortgage refinance demand drops further, despite homeowners sitting on $17 trillion in equity link

• Despite significant home equity gains, high interest rates deter homeowners from refinancing. The average interest rate for 30-year fixed-rate mortgages decreased slightly to 7.00% from 7.03%.

• Homeowners collectively held $17 trillion in equity at the end of Q1 2024, a gain of $1.5 trillion in one year. Applications for refinancing fell 2% last week, marking the fourth consecutive weekly decline.

• Mortgage applications for home purchases increased 1% for the week but remain 13% lower than the same period last year. The rise was driven primarily by increases in FHA and VA applications.

• Fed Chair Powell's recent testimony has not yet impacted mortgage rates, which remained steady this week. However, the upcoming consumer price index data could influence rate movements.

More Homes for Sale May Signal Shift to Buyer’s Market link

• Inventory of homes for sale is increasing, giving buyers more options and potentially driving down prices. This shift could mark the end of the seller's market that has dominated recent years.

• Rising mortgage rates are deterring some buyers, slowing the market's pace and leading to longer listing times. Sellers might need to adjust their expectations and pricing strategies accordingly.

• Cities like Phoenix, Austin, and Las Vegas are seeing significant increases in housing inventory. These areas are indicative of broader national trends that may continue throughout the year.

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River Rock House

Link to the listing

That's all, folks.

Cheers,

Vidit

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