June 2024 Economic Update: Insights for Home Buyers and Sellers

Dear Friends & Fellow Colleagues,

I hope you are doing well. As we close in June 2024, I wanted to share some vital economic updates that are particularly relevant for home buyers and sellers. Staying informed about the latest market trends can help you make the best decisions in this dynamic real estate environment.

Inflation Trends Recent data shows encouraging signs that inflation is cooling. Here are some highlights:

• Consumer Price Index (CPI): In May, consumer prices increased by 3.3% year-over-year, a slight decline from April's 3.4%. Month-over-month, consumer prices held steady, marking the first time since July 2022 that prices did not rise.
• Core CPI: Excluding food and energy, the Core CPI rose by 3.4% year-over-year, the smallest increase since April 2021. This marks the third consecutive month of moderation in year-over-year increases.
• Producer Price Index (PPI): Wholesale prices showed a 0.2% month-over-month decline in May. Year-over-year, the PPI increased by 2.2%, with the Core PPI up by 2.3%.
• Personal Consumption Expenditure Index (PCE): The Fed’s preferred inflation gauge showed a 2.6% year-over-year increase, indicating significant progress towards the Fed's 2% target rate.

Stock Market Performance June was a positive month for the stock markets:

• Dow Jones Industrial Average: Up 1.1% from May, closing at 39,118.86.
• S&P 500: Increased by 3.5% from last month, ending at 5,460.48.
• NASDAQ: Rose by 6%, closing at 17,732.60.

Treasury Bond Yields and Mortgage Rates Treasury bond yields, which often influence mortgage rates, have decreased:

• 10-year Treasury bond: Yielded 4.36%, down from 4.51% in May.
• 30-year Treasury bond: Yielded 4.51%, down from 4.64%.

Mortgage rates have also seen a decline:

• 30-year fixed-rate mortgage: 6.86%, down from 7.03%.
• 15-year fixed-rate mortgage: 6.16%, down from 6.36%.

Home Sales Data The latest home sales data reflects the current market conditions:

• U.S. Existing-Home Sales:?In May, 4.11 million units were sold, down 2.8% from last year. The median price was $419,300, a 5.8% increase from May 2023. Inventory levels increased to a 3.8-month supply.
• California Home Sales: Sales totaled 277,410 units in May, down 6% from last year. The median price reached $908,040, an 8.7% year-over-year increase, with a 2.6-month supply of homes available.

What This Means for You For home buyers, the cooling inflation and declining mortgage rates might provide a more favorable environment for securing financing. Meanwhile, for home sellers, the increasing median home prices indicate strong demand, especially in regions like California.

If you have any questions or need personalized advice, please don’t hesitate to reach out. I am here to help you navigate these market changes and achieve your real estate goals.

Best regards,

Tina Lucarelli - Global Real Estate Advisor

Engel & Volkers Westlake Village

DRE 02102354