MetroIntelligence Economic Update by P. DUFFY
Falling mortgage rates in 2024 predicted to help unfreeze the housing market
For the housing market, lower mortgage rates are widely expected to lead to a surge in pent-up demand for not just new homes but for existing homes offered by sellers who need to move for a variety of reasons. Average fixed 30-year mortgage rates, which last peaked at 7.8% in late October, have since fallen by over 100 basis points, suggesting an early start to the homebuying season.
Construction spending up 0.4 percent in November and 11.3 percent year-on-year
November construction spending was estimated at a seasonally adjusted annual rate of $2,050.1 billion, up 0.4 percent from October and 11.3 percent year-on-year. This is the 11th consecutive month of increases. During the first eleven months of 2023, construction spending amounted to $1,817.1 billion, up 6.2 percent year-on-year. For private residential construction, spending on new single-family homes rose 2.9 percent from October and 5.5 percent year-on-year to $400.4 million. Spending on multifamily construction edged up 0.1 percent from October and was up 13.6 percent year-on-year.
Federal Reserve meeting minutes advises patience before declaring inflation fight over
Members agreed that their postmeeting statement should acknowledge the slowing of economic activity from its strong pace in the third quarter as well as the fact that inflation had eased over the past year but remained elevated. The target range for the federal funds rate was likely now at or near its peak for this policy tightening cycle while leaving open the possibility of further increases in the target range if these were warranted by the totality of the incoming data, the evolving outlook, and the balance of risks.