California Weekly Market Data ending October 2, 2023

Congress avoids shutdown and passes stopgap bill

A deal came together a few hours before the deadline and Congress averted a government shutdown. Congress passed a stopgap spending measure that allows funding for the government to continue operating until November 17.

Inflation outlook brightens but rates remain elevated

More solid evidence of an economic slowdown will need to be seen before rates start coming down meaningfully. Also, rising oil prices heading into the fourth quarter could keep the overall inflation high in September and October.

Consumer confidence slips again as anxiety about the future grows

Rising gasoline prices and high interest rates weighed down consumers’ confidence last month, as the Conference Board’s Index fell to a four-month low.

New home sales drop to 5-month lows

The recent surge in rates is adding more stress to buyers and begins to take the momentum out of new housing demand. Elevated costs of borrowing may continue to slow sales in September and October as market indicators showed a decline in buyer traffic in both August and September.

Construction spending continues to trend up

High financing costs and a flood of apartment units set to be delivered in coming years is likely the primary reason for the moderation in construction activity in this area.

An improving inflation outlook and a still-solid labor market are some positives that should help the economy and the housing market weather the headwinds in the fourth quarter and carry them to a better 2024 once rates start coming down.

SOURCE : California Association of Realtors

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