What’s Up with Real Estate?

National news and local views for the week ending Friday, September 22, 2023

The Fed did nothing (kept rates on hold) and still shook up everything (by forecasting stronger economic growth and higher interest rates). Average 30-year mortgage rates are back near their recent peak, and transaction volumes are dropping…but home prices keep grinding higher in most markets.

National Real Estate News

What the Fed said…

Everyone expected the Fed to skip a rate hike at the Sept 20 meeting, and that’s exactly what happened. What caught the market by surprise was ‘higher for longer’ commentary from Chairman Powell, as well as Fed member forecasts for an additional rate hike this year and only 2 rate cuts by end-2024. The Fed wants 2% core inflation, and Powell definitely thinks they’ve stuck the ‘soft landing’.

…the market didn’t like

The Fed is now forecasting stronger GDP growth, lower unemployment rates, more rate hikes, and later rate cuts. These are all things that the bond market doesn’t like to hear. After two days of carnage in the Treasury and Mortgage Backed Securities market, average 30-yr mortgage rates are back at 7.47% – very near recent peak levels. Affordability remains a major challenge for buyers.

Existing home sales slow

On a seasonally-adjusted, annualized basis, just over 4 million existing homes were sold in August 2023. That’s roughly 1% below last month, but 15% below August 2022. Median sales prices, however, edged slightly higher month-over-month to $407,000 (!!!), which is up nearly 4% year-over-year. Low inventory and elevated mortgage rates continue to crimp transactions.

Local Market Trends

As of Friday, September 22, 2023

Area	Median Price	Active Listings	New Listings – 5 days	Median Days on Market
Layton, UT	$623,900 0%	107 0%	5	43 0.2%
Farmington, UT	$636,900 0%	50 0%	1	48 -0.1%
South Weber, UT	$499,999 0%	25 -0.6%	–	125 1.3%
South Ogden, UT	$434,500 -0.1%	28 -0.8%	4	32 -0.3%