Market Update - January 2025
Market Action Index - January 2025
Happy New Year!
Can you believe we’re already halfway through the first month of the year? Time flies! Activity is picking up, and I’ve got several exciting opportunities in the works. Despite some economic headwinds, I’m confident we’ll see momentum build as we move closer to spring.
It’s still a great time to buy as the market shakes off the holiday lull. It’s also the perfect time to start preparing to list a home for sale. I’m currently working on bringing homes to market in Poway, Fallbrook, and Rancho Bernardo (55+).
If you’re interested in learning more about these properties or discussing your real estate goals, feel free to reach out! Let’s make this year a successful one together.
Market Segments - January 2025
“The NAR predicts that mortgage rates will stabilize near 6%.”
Market Profile - January 2025
HOT TOPICS
Would you like a home valuation and neighborhood report every month? Those receiving these have really enjoyed them! If you’d like a free home report every month, all I need is your address and an email for you. It’s a great way to track home values, loan information, and know exactly what’s being bought and sold in your area Send me an email brendan.gail@kw.com to be added!
Devastating Wildfires in Southern California -
The recent (and ongoing) wildfires in LA County have destroyed nearly 10,000 properties, forcing 180,000 people to evacuate. Housing activity in affected areas will stall temporarily, but demand is expected to recover during the spring season. With a tightened housing supply, rents and home prices in surrounding areas could increase, while rebuilding efforts may boost economic activity by late 2025. However, the wildfires may exacerbate the insurance crisis, potentially driving up homeowner costs.
December Housing Sentiment -
The Fannie Mae Home Purchase Sentiment Index dropped slightly in December to 73.1, though it remains higher than a year ago. Consumer optimism about mortgage rates persists, with 42% expecting lower rates in the next 12 months, despite recent increases following the jobs report. Rising rates and affordability concerns may continue to impact sentiment in the coming months.
Job Growth Exceeds Expectations -
Nonfarm payrolls grew by 256,000 in December, far exceeding the 155,000 forecast. Gains were led by health care, leisure, hospitality, and government sectors, while manufacturing saw a slight decline. The unemployment rate improved to 4.1%, and wages rose 3.9% year-over-year. This unexpected labor market strength likely delays any immediate rate cuts by the Fed.
Mortgage Rates Increase After Jobs Report -
Stronger-than-expected job growth in December pushed mortgage rates higher, with the 30-year fixed rate climbing to 7.26%. Bond yields rose alongside expectations that the Federal Reserve may delay rate cuts in upcoming meetings. Further fluctuations in mortgage rates are anticipated with the release of the Consumer Price Index.
Consumer Expectations on Inflation and Job Turnover -
Consumers’ short-term inflation expectations held steady at 3.0% in December, while medium-term expectations rose slightly. Expected home price growth also increased marginally to 3.1% for the next year. Job market sentiment weakened, with job turnover expectations falling and fewer consumers confident about finding new employment if needed—the lowest level since April 2021
Home projects this spring?? Need a guy (or girl) for that? I probably know someone…
Reach out anytime! Call, text, or message me 😊
Brendan
P.S. I always appreciate referrals! It’s among the greatest compliments I can receive. If you know someone who is has questions about the real estate market, please send them my way. Thank you!