California Weekly Market Data for week ending March 4, 2024

Consumer confidence slips for the first time in three months

Recent rising trend in interest rate  and concerns over the U.S. political environment might be a contributing factor to the decline in the optimism.

Mortgage rates remain elevated after key inflation data

The Fed wants to see more evidence that inflation is slowing consistently and could wait until the second half of the year before making any rate cuts. Mortgage rates, as a result, could remain elevated at the start of the homebuying season. 

Income edges up but inflation-adjusted spending dips

Despite the increase in income, consumers were still spending less after adjusting for inflation. With the core PCE deflator notching its biggest monthly gain in 12 months, real consumer spending, in fact, declined 0.1%, the lowest since August of last year. 

Construction spending unexpectedly falls in January

With vacancy rate likely to climb as more new apartments are expected to be released this year, multifamily construction should pull back further in the next 12 months.

Mortgage delinquency holds steady near historic lows

With home prices projected to increase in 2024 and the economy likely to experience a mild growth this year, delinquency rate could rise but is not expected to increase sharply in the next 12 months. 

While it is widely expected that the Federal Reserve will not cut its policy rate in its upcoming meeting, mortgage rates could begin to trend down more meaningfully towards the end of the second quarter if the economy continues to slow.

SOURCE : California Association of Realtors

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