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Guardian Asset Management
Weekly Newsletter
Guardian endeavors to provide you with the latest in housing, industry and market news from Washington D.C. and around the country. It is our goal as your industry partner to be informative, relative and topical.
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Sorry, America, it's looking like higher interest rates are going to stick around longer | |
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It doesn't look like the Federal Reserve will cut interest rates any time soon.
On Wednesday, the Federal Open Market Committee will announce whether it will continue to hold interest rates steady or cut them — and it's looking like it will choose the former. The CME FedWatch Tool, which estimates the market's view on the likelihood of interest-rate adjustments, predicted as of Monday morning there's a 97.1% chance rates would remain unchanged.
It all comes down to the data. Julia Pollak, the chief economist at ZipRecruiter, told Business Insider that the March jobs report was "the Fed's holy grail: strong job market with non-inflationary growth."
In the report, released earlier this month, average hourly earnings rose by 4.1% year over year in March — a slower rate than in the last few years — the unemployment rate wasn't too high, and there was strong job growth with 303,000 jobs added. In addition to the growth seen in January and February, these monthly job gains suggest the labor market has been strong so far this year.
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For the First Time in Nearly 2 Years, There’s No Major American Metro Where Home Prices Are Falling | | |
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Inventory is below typical April levels, driving home prices up. Continually rising mortgage rates are further eroding affordability–and this week’s Fed meeting confirmed that mortgage rates are likely to hold steady for the foreseeable future.
The median home-sale price rose from a year earlier or stayed the same in all 50 of the most populous U.S. metros during the four weeks ending April 28, the first time that has happened since July 2022. Nationwide, the median sale price rose to a near-record $383,188, up 4.8% year over year. Mortgage rates also continued climbing, with the weekly average hitting its highest level in five months. High prices and rates drove the median monthly housing payment to a record $2,890, up 15% year over year.
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US mortgage delinquencies
decline for first time in 6 months
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For the first time in six months, the overall delinquency rate fell from a year earlier, reaching 2.8% in February.
According to a new report by CoreLogic, this positive trend indicates that the vast majority of borrowers remain financially resilient enough to make timely payments.
“The US delinquency rate fell from a year earlier for the first time in six months in February, indicating that mortgage performance remains strong,” said Molly Boesel, principal economist at CoreLogic. “The decrease in delinquencies was driven by the decline in the share of mortgages that were six months or more past due, a number that has been consistently shrinking and fell to its lowest level in 15 years in February.”
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Real Estate Map Shows
Where It's Cheaper to Rent Than Buy
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The idea of working hard, saving up and buying a home has always been an integral part of the American dream.
In the current housing market however, renting might be the more financially prudent move.
A new study from Bankrate has revealed that in all 50 of the largest U.S. metros it is cheaper to rent than to buy.
The study, which was based on an analysis of Zillow and Redfin housing data, found the cost of owning a house to be 37 percent higher than renting per month.
Whilst average rents in the U.S. are around $1,979 per month, the typical mortgage payments for median-priced homes sit much higher, at just over $2,700.
"I don't think anyone would say that buying in this market is easy," said Skylar Olsen, chief economist at Zillow.
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Gen Z adults moving in with parents
due to high housing costs
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Rising housing costs mean a growing number of adults are heading back home to mom and dad after graduation from college, causing financial stress across generations, a new survey says.
Approximately 46% of parents said they had "boomerang" adult-age children who had returned home to live with them at some point, according to research from financial services firm Thrivent. Half of that share attributed the trend to the surging costs of homes and rent, with that particular sentiment increasing by 15 percentage points from just a year earlier.
"This is a wakeup call that's gone unanswered," said Chaz Black, Thrivent financial advisor, in a press release. "More young adults returning home underscores the enormous – and growing – financial pressures they're facing after graduation."
The data indicates that the pressure is also rippling across to their parents. As children moved back in, 38% of their parents said they were struggling to pay off their own debts, with the share increasing from 23% a year ago. Close to 37% found it difficult to save for their long-term housing and retirement goals; the sentiment more than doubled from 16% in 2023. Thrivent conducted its recent poll in April, surveying over 2,200 people.
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Home-price gains accelerate in the U.S.,
climbing 6.4% in February
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U.S. home-price gains accelerated in February, extending a streak of increases that has pushed many would-be buyers to the sidelines.
Prices nationally climbed 6.4% from a year earlier, an S&P CoreLogic Case-Shiller index shows. That's larger than the 6% annual gain in January.
Purchasing a home is more expensive than ever in many areas of the country after run-ups in both prices and mortgage rates over the past couple of years. While new listings have ticked up recently, giving buyers more choices, inventory is still stuck well below historic levels, so competition remains intense.
"Following last year's decline, U.S. home prices are at or near all-time highs," Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement Tuesday. "For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York."
A measure of values in 20 cities was up 7.3% from a year earlier. San Diego continued to show the biggest annual gain, with prices soaring 11.4%. Chicago and Detroit followed, with increases of 8.9%.
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