WEEKLY MARKET UPDATE March 4th, 2024

CoreLogic's most recent Loan Performance Insights report has indicated a slight increase in mortgage delinquency rates, from 3.0% in December 2022 to 3.1% in December 2023. However, both rates are close to historic levels, so there is no cause for concern. Homeowners are paying their mortgages on time, likely due to the high levels of home equity and low unemployment rates.

Mortgage rates have a significant impact on the housing market, and it is expected that rates will eventually follow inflation lower. With the "core" Personal Consumption Expenditures (PCE) approaching the Federal Reserve's 2% target, it remains to be seen how close is 'close enough' for the Fed to start cutting rates.

While builders are bullish, sales have been lackluster. New home sales for January 2024 remained flat month-over-month, with 661,000 units sold on a seasonally adjusted, annualized basis. The median price increased by 2% to $420,700, and the average price rose by 8% to $534,000, primarily due to increased sales in the higher-priced West region. Approximately 14% of homes sold in January were new, compared to the long-term average of 10%.

National home prices continue to set new records. The Case-Shiller national home price index for December 2023 rose by 0.2% month-over-month on a seasonally adjusted basis, the same as in November 2023. For the full year of 2023, the index rose by 5.6%, indicating a 47% increase over the last four years.

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