Jared Prevost’s Post

The warmer days are upon us here in the Low County. June is a busy month as we prepare for summer activities. Hope you find the latest Economic and Bluffton Real Estate information below informative and useful. Inflation data for May 2024 indicates a cooling trend in overall and core inflation rates: 1.     Overall Inflation: The Consumer Price Index (CPI) for May increased by 3.3% compared to the same month last year and down from the April reading. 2.     Core Inflation: The core inflation measure, which excludes volatile food and fuel prices, rose by 3.4% year-over-year, down from April at 3.6%. The 3.4% rise in core inflation marks the slowest rate of increase since April 2021. Federal Reserve officials decided to keep interest rates unchanged at their June meeting and indicated they may reduce borrowing costs once before the end of 2024.    According to Bank Rate, for today, Friday, June 14, 2024, the current average interest rate for a 30-year fixed mortgage is 7.0%, falling 3 basis points from a week ago.                                                                 Bluffton, SC Real Estate In contrast to US existing home sales in May which fell -8.1%, Bluffton Area home May sales rose +1.9% and 22.7% Year to Date vs. year ago respectively. New Listings were strong while Median Prices and Percent of List Price Received were steady.  Days to sale rose to about 2 months.

The Housing Market will CRASH!!!! 🤣 Every few years, a group of market 'experts' and their media enablers desperate for attention will opine about how the housing market is about to crash. The word 'crash' is relative, and even when prices drop 15%, 20%, they usually recover within a few years. Here are some notes to ponder as we evaluate the above headline: 1. If housing prices 'peaked' a year ago - which is true for some areas but not others - this has little effect on those who bought in the past 2 years when you consider most stay in their home for about 13 years. 2.  Unless there is a significant surge in the rate of unemployment, which is currently not in the forecast, the housing market is expected to continue to rebound from some corrections seen in 2023. 3. Real estate markets are ultra-localized, even within cities and towns. Some homes where pricing surged more dramatically than others are more prone to rebalancing than others. Some areas that experienced massive price increases were undervalued and now experience new demand that appears to be consistent. 4.  There is a housing shortage and ongoing job creation. Oversupply and a job-cutting recession are the two primary drivers of home price declines. 5. While the inventory of homes for sale has increased over 30% from a year ago, this still represents only about a 3-month housing supply, which is roughly half of where the market was in 2019. In the years leading up to the housing crash of 2007/8/9, inventory stood around 13 months supply...more than 400% higher than what we have today. 6. Today, homeowners have a much higher level of equity in their homes. 7. Americans are not moving as much for work as they used to: they can stay put for longer, and many large corporations have spread their wings beyond New York, Los Angeles, Chicago, Miami and San Francisco. 8. The Mortgage Bankers Association predicts that mortgage rates will drop to about 6.6% by the end of 2024, which will slightly improve the cost of borrowing to buy a house. However, home prices are anticipated to continue to rise, so overall affordability will remain challenging. 9. A rapid rise in insurance rates or real estate taxes can trigger increased inventory. Insurance rates have risen dramatically over the past few years so this should slow in many areas. Right now there are few - if any - indicators of an imminent housing crash.

#Numberstowatchthisweek: This coming week, among the usual updates on mortgage demand and unemployment claims, I'll be looking for several updates on the housing market, the health of the economy (both for October and November) and consumer sentiment: Monday, 11/18: > Home builder confidence index: Also known as the #HousingMarketIndex, this monthly survey by the #NAHB gauges home builder perceptions of single-family home sales and sales expectations as well as traffic of prospective buyers. More recently, the survey also asks about the use of #pricecuts and #salesincentives (such as mortgage rate buydowns) to move inventory. Tuesday, 11/19: > New residential construction: This monthly update for new, privately owned housing units provides national and regional data on the number of new housing units authorized by #buildingpermits; authorized, but not started; #housingstarts; under construction; and completed. Thursday, 11/21: > Sales of #existinghomes from the #NAR, which will also provide summaries on inventory, months of inventory, median home prices, sales by price range and who's buying homes. > U.S. Leading Economic Indicators: The monthly #LeadingEconomicIndex (LEI) by #TheConferenceBoard, a nonprofit think tank, provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The #CoincidentEconomicIndex (CEI) provides an indication of the current state of the economy. Friday, 11/22: > S&P #FlashPMI report, which provides the earliest read on the health of the U.S. economy for the same month, and also separates the services and manufacturing sectors. > Index of #Consumersentiment. The final of two updates from the University of Michigan also tells us the #inflationexpectations of consumers over the short and long terms.

🏠The National Association of Home Builders/Wells Fargo Housing Market Index (#HMI) was released this morning for the month of September. According to the #HMI, homebuilder confidence rose 2 points to 41, haltering five consecutive months of declines.    🔎Looking at the components, all three components are below 50:  ➟ Current Sales Conditions: up 1 point at 45  ➟ Sales Expectations: up 4 points to 53  ➟ Traffic of Prospective Buyers: up 2 points to 27   😃With all three components increasing this month, the long anticipated #Fed rate cutting cycle is changing sentiment among #homebuilders, especially with the biggest jump occurring in sales expectations (i.e., over the next six months). With headline #CPI coming in at its lowest year-over-year reading since February 2021 and the labor market gradually cooling (regardless whether you are looking at #payrolls or #jobopenings), the #Fed has enough good data to end the “Higher for Longer” stance which they had maintained for over a year. 📉#mortgagerates are beginning to unlock #existinghome inventory creating more competition for #homebuilders as rates begin to unshackle homeowners (the analogy works whether you use the lock-in effect or “golden handcuffs”). Even though #inflation is coming down, August did see a rise in the #shelter component which continues to drive the bulk of the remaining “stickiness” (contributing over 70%). 📢To read more commentary and insights about today’s release from #NAHB’s Chief Economist, Robert Dietz, click on the link below. #NAHB #economics #homebuilders #sentiment #homebuilding #construction #housing

*Fed Still Signals Three Rate Cuts in 2024 After eleven rate hikes since March of 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marks the fifth straight meeting they held rates steady. What’s the bottom line? The Fed noted that three rate cuts are still expected this year. The Fed’s "dot plot" of member forecasts showed that 15 out of 19 members still expect cuts of between 50 and 100 basis points over the course of 2024. *Existing Home Sales Hit Highest Level in a Year Existing Home Sales jumped 9.5% from January to February to a 4.38-million-unit annualized pace, reaching their highest level in a year per the National Association of REALTORS® (NAR). However, the 1.07 million homes available for sale at the end of February is still below healthy levels at just a 2.9 months’ supply of homes at the current sales pace.   *Home Builders Feeling Positive Confidence among home builders broke above the key breakeven threshold of 50 and into positive territory for the first time since last July, per the National Association of Home Builders (NAHB). Their Housing Market Index climbed three points to 51 in March, which was also the fourth consecutive monthly gain. Any score over 50 on this index, which runs from 0 to 100, signals that more builders view conditions as good than poor.   All three index components posted gains this month, with current and future sales expectations both well into expansion territory at 56 and 62, respectively.     *Favorable February for Housing Starts Housing Starts saw a big rebound in February, with both single-family and multi-family construction improving from January’s slump. When compared to a year ago, however, single-family starts were up 35.2% while multi-family starts were down 35.9%. This suggests that we’re seeing a shift from multi-family to single-family construction, which is welcome news as this is where supply is needed around much of the country.   Single-family Building Permits also reached their highest level in a year, up 29.5% when compared to February 2023, signaling that the numbers for future supply are also favorable.   *Slight Decline in Initial Jobless Claims Initial Jobless Claims were relatively flat in the latest week, with 210,000 people filing for unemployment benefits for the first time. This was a decline of 2,000 from the previous week. Continuing Claims rose by 4,000, with 1.807 million people still receiving benefits after filing their initial claim.   *Technical Picture Mortgage Bonds broke above their 50-day Moving Average last Friday, which was a positive technical development. The 10-year has broken beneath its 25-day and 100-day Moving Averages, ending last week battling the formidable 200-day Moving Average, which could be difficult to break through.

Here is a snapshot of last week’s market in Phoenix! Increased supply 📈 + reduced demand 📉= Buyers Market in Phx! This data in Phoenix tells us that homes are sitting on the market longer and possibly selling for less money. This can easily be attributed to the typical summer slow-down but we have also been seeing inventory rising all over Maricopa County. This means increased competition for sellers! Buyers aren’t rushing the market and the ones who are making offers have more options than ever. They want move in ready homes and are not wiling to make repairs or updates. National data shows high inventory and reduced sales as well. Additionally, only 25% of reported inventory is ready to move in! 😳 Which leads me to wonder, why? Could it be that there is such an increase in new construction sales, could it be affordability forcing owners to sell, could sellers be exhausted and done holding out for lower rates to sell and move? So many possibilities. We will know more soon now that analysts have their hands on final June numbers and can do their thing! 💸 Mortgage Rates: Chatter of a September 2024 rate cut has been circulating since late last year. Those sharing these sentiments are getting louder and louder 🔊 since “rally-favorable” data was provided in last week’s Powell press conference. Rates are officially the lowest they have been all year (since December 2023)! With jobs reports coming out today (Friday, August 2), real estate and mortgage professionals alike are waiting with bated breath to see what data is released and how it will affect mortgage rates! How low do you think mortgage rates will have to go for buyers to flood the market??? If you are a home buyer who has been waiting for rates to drop, what is your magic #? And do you have any fears of a hyper-competitive seller’s market causing home prices to rise and/or a lack of inventory?

Each month our analysts at The Farnsworth Group compile the latest data available regarding the leading supply and demand drivers for the construction and remodeling industry. Here are a few top takeaways in June: 1️⃣ Mobility for Homeowners with Mortgages Remains Low It's no new news that there is still low housing inventory, which is keeping home values elevated. Of key interest in the current macro-economic landscape is a majority of current homeowners, with mortgages, have a rate less than 4%. 2️⃣ A Large Population of Homeowners Have Low (or No) Interest Rates Over 60% of homeowners that have a mortgage have a rate less than 4% and 1 in 5 homeowners have a mortgage rate that is less than 3%. Further, nearly 40% of homeowners are without a mortgage - a record high in the past decade. This market reality, combined with high home equity, represents a more mobile segment better insulated from high rates, and that is less impacted by affordability concerns. Thus, home buying activity continues and Fed actions on interest rates are making less of a dent in housing related inflation. 3️⃣ Consumer Confidence Is Trending Positive Consumer confidence is continuing to trend positively as it has since it's low that started in mid-2022. With this continuing upward trend, it's important to realize that by in large, consumers are still in a neutral mindset, which translates into a continuing level of uncertainty. The current economic environment is forcing homeowners to make trade-offs with discretionary funds, with home improvement projects being weighed against discretionary purchases like travel, entertainment, dining and the like. Since, historically, consumer confidence is correlated to actions by the Fed, watching the actions of the Federal Reserve will remain pertinent for a while yet.   There are over a dozen other indicators that our team monitors on a regular basis in our work to advise building material manufacturers and suppliers about their best next moves for gaining share and winning in the current market environment. Request to review all of these indicators here: https://lnkd.in/gZi_7mCD Grant Farnsworth, Adam Mowrey, Taylor Pence, Dave King

To everyone in my network who builds or deploys teams. These datapoints are worth noting. In particular if you are pushing your workforce to be on site or heavily co-located.

Do you offer relocation for your higher level candidates when you recruit? If you do, you should take a look at the stats below. Relocation makes minimal sense at this point unless the job offer is through the roof. My husband and I have talked several times and barring some sort of major life change........ You couldn't pay us enough to move to from our 15 year 2.5% mortgage rate or our current home. So what's all this ⬇ mean? You need to find the talent that is currently working in your backyard and you have to sell your company to them. If you don't have a recruiting partner in the market, my bet is you probably aren't getting the top talent in your area. If you aren't talking with a recruitment firm or have a relationship with one already, you should be. If you aren't sure where to start, I'd love to chat. My team knows what it takes to find the top talent you need and are experts in their areas. We can help guide you through that process.

Let me give you all a short and shocking post. I gathered these data points from various places. Roughly 1 in 10 homes (probably more really), in the US are worth more than $1M dollars (Redfin) 1 in 4 in places like southern CT or 1 in 5 in Boston. To reasonably afford a $1M home, and depending on the down-payment, a household would generally need to make over $400K/yr. As of last year, 1.8% of US earners made more than $400K/yr (IRS). As of the last recorded year, 2022, median household income was $75K/yr. If you put about 7% down, that annual income affords you no more than a $310K house. After a recent peak of $445K in June '23, the current median list price for existing homes is $409K. Over $700K in California, $460K in FL, and so on. As of mid-last year, 9 in 10 homeowners had mortgages less than 6% so only 1% of homes switched hands, an all-time historical low (redfin). So, I think we can all agree that, barring a job offer over $120-150K/yr, re-location is no longer an option in the U.S. That changes the game a little bit, no?