WEEKLY MARKET UPDATE December 7th, 2024

As 2024 winds down, thank you for reading and engaging with my articles. As we embrace the start of the holiday season, I hope it brings joy and warmth to you and your loved ones.

Now, look at what’s shaping the real estate market as we approach 2025.

Forecasts for 2025 suggest a modest rebound: transaction volumes are expected to rise, and home prices may grow by 2–4%. Mortgage rates will continue to be the key determinant of market activity.

Pending sales rose 7.5% in September and 2.0% in October after five consecutive months of declining mortgage rates earlier this year. However, the recent uptick in rates could dampen November’s numbers. It’s a reminder that mortgage rates remain the key driver in our market. Earlier this year, five months of declining mortgage rates boosted pending home sales:

• September: +7.5% month-over-month
• October: +2.0% month-over-month

However, the recent uptick in mortgage rates could slow this momentum in November. The path forward is clearly closely tied to rate trends.

Inflation and the Fed’s 2% Target

Recent inflation data shows challenges ahead:

• Headline PCE: +2.3% YoY in October (up from +2.1%)
• Core PCE: +2.8% YoY in October (up from +2.7%)

While inflation has cooled since its 2022 peak, the Fed’s 2% target remains elusive. All eyes are on the December 17–18 Fed meeting for further rate decisions.

Jobs Market: A Steady but Cautious Picture

October job openings rose slightly to 7.7 million, a far cry from the highs of 2021–2022. Hiring and separation rates have normalized to pre-pandemic levels, signaling a steady but careful labor market.

2025 Housing Market Forecasts

Market projections hinge on mortgage rate trends:

• Rates below 6% could drive a 12% rise in home sales and a 4% price increase.
• California’s recovery and the strength of the Midwest/Northeast markets are expected to support national price growth.

While uncertainties remain, the data provides optimism for a healthier housing market next year.

Wishing you a fantastic week and a joyful start to the holiday season!