Home sales have been slow lately, as you’ve seen me write over these past few weeks; however, I’m seeing some demand signals start to perk up. Redfin reported that their Homebuyer Demand Index, which measures home tour requests and Google searches for homes for sale, is showing a 6 percent increase in buyer activity. Freddie Mac is also reporting an increase in buyer activity.
This activity is likely thanks to mortgage rates resuming their decline and savvy buyers that have been sitting on the sidelines getting a jump on their home search. Freddie Mac reported last week that average rates for both the 30-year fixed and 15-year fixed dropped nicely. They also reported that the small changes in rates are bringing back buyer demand in large swings.
We’re also continuing to see signals that favor the trend for rate improvement. Of course, we never know for sure what’s going to happen with rates but last week’s report on consumer inflation numbers revealed that inflation has ticked lower again in December, showing the annual rate dropping from 7.1 percent to 6.5 percent. This drop marked the sixth consecutive month of inflation improving. We know that rising inflation can often push rates higher and sustained lower inflation can pull rates down.
As for what I’m watching this week…
We have a holiday-shortened week due to the observance of Martin Luther King Jr Day. As for the rest of the week, we’re expecting a couple of high-impact inflation and housing data reports.
First on Wednesday is the latest wholesale inflation numbers. Producer prices in December are expected to fall 0.1 percent on the month for a year-over-year increase of 6.8 percent which would compare with 7.4 percent in November, which was down from 8.0 percent in October.
Retail sales are expected to fall 0.8 percent in December on top of November’s weaker-than-expected 0.6 percent decline. It looks like declines are thanks to decreased vehicle sales and gas prices falling back.
As for the housing market, homebuilder sentiment is expected to remain steady. We’ll also see the numbers for Housing Starts and New Building Permits. December’s annualized rates are expected at 1.362 million for starts and 1.380 million for permits which would represent lower housing starts but an increase for new building permits.
And finally, on Friday we get a look at the latest numbers for Existing Home Sales. Existing home sales in December are expected to contract a little further to a 3.97 million annualized rate versus November’s lower-than-expected 4.09 million.
If you’re thinking you’d like to beat the Spring Homebuyer Rush that I’m expecting, now’s the time to reach out and we can discuss your options. Reply to this email, it comes directly to me; or text/call me at 818.307.6072.