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This Week In Real Estate – June 16, 2024

Central Oregon Real Estate - This Week In Real Estate

This Week In Real Estate – June 16, 2024.

In May, inflation moderated more than anticipated, as reported by the Bureau of Labor Statistics in its latest Consumer Price Index (CPI) released this week in real estate. The CPI data indicated that inflation stood at 3.3% in May, down from the 3.4% annual increases observed in March and April. During its seventh consecutive meeting, the Federal Reserve opted to maintain unchanged interest rates. “We want to gain further confidence, and certainly more good inflation readings will help with that,” Fed Chair Jerome Powell said. According to the Committee, “the risks to achieving its employment and inflation goals have moved toward better balance over the past year.” Looking ahead, the Fed’s latest forecast predicts a 25-basis point reduction in the Fed Funds Rate in 2024, followed by an additional 100 basis points in cuts during 2025. Meanwhile, average mortgage rates declined for the second consecutive week, reflecting indications of a slowdown in economic growth, according to Freddie Mac. Below are a few newsworthy events from the second week of June that influence our business:

Fed Holds Rates Constant; Sees One Cut For 2024.

The Federal Reserve’s monetary policy committee held constant the federal funds rate at a top target of 5.5% at the conclusion of its June meeting. Overall, the central bank continues to look for sustained, lower inflation readings, with the data having shown insufficient progress during the first quarter. The May CPI data was a step in the right direction, but the central bank will remain data-dependent with respect to an eventual easing of monetary policy. An important reason for the lack of recent inflation reduction remains elevated measures of shelter inflation, which can only be tamed in the long run by increases in housing supply. Ironically, higher interest rates are preventing more construction by increasing the cost and limiting the availability of builder and developer loans necessary to construct new housing. Chair Powell noted the challenges for housing in the current environment. He stated that the “housing situation is complicated.” He indicated that the best thing the Fed could do for the housing market would be “to bring inflation down, so that we can bring rates down.” However, Chair Powell noted that “there will still be a national housing shortage as there was before the pandemic.” We agree. The housing market requires non-monetary policy help on the supply-side of the industry, including labor force development and zoning reform, to address the housing shortage. The Fed also published new economic projections at the conclusion of its June meeting. These projections include a consensus expectation of just one rate cut in 2024, consistent with NAHB’s current economic forecast. Full Story…

Inflation Slowed For Second Straight Month, CPI Shows.

The Consumer Price Index was flat in May the Labor Department said on Wednesday. For the second straight month, inflation slowed – welcome news for American households and policymakers after a hot start to 2024. The latest CPI figures show overall prices did not rise at all – compared to the 0.3% increase in April. Over the last 12 months ending in May, the index rose 3.3%, compared to 3.4% in April. The core index rose 3.4% over the last 12 months, down from 3.6% the prior month. Shelter prices continued to rise at a quick pace, up 0.4% for the fourth consecutive month. Full Story…

Mortgage Rates Continue To Move Down.

FreddieMac released the results of its Primary Mortgage Market Survey on Thursday, showing the 30-year fixed-rate mortgage averaged 6.95 percent. “Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s Chief Economist. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.” The 30-year FRM averaged 6.95 percent as of June 13, 2024, down from last week when it averaged 6.99 percent. Full Story…


Originally compiled & posted by President &CEO, Melanie Weidenbach on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.

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Mitch Darby

I am a real estate broker, architect (both licensed in the State of Oregon), and life-long Oregonian. If you are looking to buy or sell, I can help! I have Northwest Knowledge and am proud to be associated with Berkshire Hathaway HomeServices - Real Estate's Forever Brand!

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