New Signs of Housing Market Life

The Weekly Recap

Mortgage rates have fallen for the 8th straight week hitting their lowest level since June, the US economy is expected to pull off a soft landing as recession fears are fading for Americans. Fed’s Harker says rate cuts will happen but not immediately and Rudy Giuliani is super duper broke.

This will be the last newsletter for 2023 and will return after the New Year on January 5th. I hope all of you have an incredible, safe holiday season and a happy New Year! I love putting these newsletters together and appreciate all of your readership, feedback and trust!

And, if you missed it, you can check out my predictions for the NYC market in 2024 here.

New Signs of Housing Market Life

Things are looking up! One of the biggest challenges the housing market has encountered over the past year is the lack of inventory that has kept prices high and in some markets, pushed them even further up. What helps alleviate lack of inventory is new construction that starts to hit the market. It just so happens that New Construction surged in November as single-family home builds hit a 19 month high and is 9% higher YoY from last November.

Newbuild demand is a positive economic indicator as the construction activity that follows tends to boost local and state economies. Although the ‘single-family’ home is a rarity in NYC, as positive housing news permeates through national news cycles, overall sentiment about local markets tends to tick up creating more confidence and optimism in the space. Anecdotally, this is one of the busiest December’s I’ve experienced in my career.

That optimism has led to mortgage applications jumping 22% in November compared with a year ago as reported by the Mortgage Bankers Association this week. This activity, combined with eight consecutive weeks of dropping rates, continues to show the pent up demand that has been in the wings waiting. With Fed cuts not even being taken account into the current rate drops, we will see them continue to fall. The Great Refinancing is going to be upon us before we know it.

Although existing inventory levels are still tight, the market is starting to return to life.

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

The 30-year fixed-rate mortgage remained below seven percent for the second week in a row, a welcome downtrend after 17 consecutive weeks above. Lower rates are starting to bring potential homebuyers who were previously waiting on the sidelines back into the market and builders are starting to feel the positive effects. A rise in homebuilder confidence, followed by new home construction reaching its highest levels since May, signals a response to meet heightened demand as current inventory remains low.

News You Can Use

• US 30-Year Mortgage Rate Slides, Lowest Since June Bloomberg

• Despite Record Home Prices, Housing Is About to Drag Inflation Down Wall Street Journal

• Fed’s Harker Says Rates Should Move Down But Not Immediately Bloomberg

• US Economy Will Pull Off Soft Landing in 2025, CBO Projects Axios

• Why Inflation’s “Last Mile” Might Not Be So Hard After All Axios

• The Office Market Has It Hard in 2023. Next Year Looks Worse Wall Street Journal

• Recession Fears Are Starting to Fade for Americans CNN

• More Americans Than Ever Own Stock Wall Street Journal

• Underwater Car Loans Signal US Consumers Slammed by High Rates Bloomberg

The Deep Insight

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