How a Quiet Week in Economic News Could Influence Your Real Estate Decisions
This week saw little movement in mortgage markets, with inflation data coming in as expected and other economic reports causing minimal impact. As a result, mortgage rates remained nearly unchanged, still hovering near the lowest levels since early 2023, providing potential buyers with a stable opportunity to secure favorable rates.
The Federal Reserve's preferred inflation gauge, the PCE price index, showed core PCE (which excludes food and energy) rising by 2.7% in August compared to the previous year. This is a slight increase from the 2.6% rate seen over the last several months, marking the lowest levels since March 2021. While inflation continues to trend lower, progress toward the Fed’s 2.0% target has been slow, meaning mortgage rates could remain relatively stable in the near term—good news for homebuyers and sellers.
Consumer confidence took a major hit this month, with the Conference Board's index dropping to 98.7—its lowest point in over three years. Lower-income consumers expressed the most concern, particularly about rising prices, and the labor market showed further signs of strain. For the housing market, weakening consumer confidence could lead to more cautious buyer behavior, but with mortgage rates at favorable levels, motivated buyers are still likely to take advantage of current conditions. Sellers may need to adjust expectations in light of these shifting economic factors.
In the housing sector, sales of new homes in August fell by 5% from July but remained 10% higher than a year ago. The median price of new homes dropped 5% year-over-year to $420,600. New home sales are a leading indicator of future housing market activity, and the dip in prices could offer buyers more affordable options, especially compared to the tight inventory in the existing home market. Sellers should stay aware of these trends when setting prices, as affordability becomes a key factor for potential buyers.
Looking ahead, investors will focus on Fed Chair Powell’s remarks on Monday for more clarity on future monetary policy. Key economic reports next week, including the ISM manufacturing and services indices, as well as the Employment report on Friday, will offer additional insight into labor market conditions and inflation trends. For now, with mortgage rates remaining low and stable, it may be an opportune time for buyers to enter the market and for sellers to set realistic expectations based on current demand and inventory levels.
Overall, the quiet week presents a window of opportunity for buyers to take advantage of favorable mortgage rates, while sellers should remain mindful of economic shifts that could influence buyer behavior. Staying informed will help you navigate these conditions and make the best decisions for your real estate goals.
