Market Update 4/25/2023

Sales of previously owned homes have experienced a 2.4% decrease in March due to a sudden rise in mortgage interest rates. As a result, sales are now 22% lower than in March of last year. With home prices remaining historically high, even daily fluctuations in mortgage rates make buyers more sensitive. The persistence of multiple offers at lower price tiers suggests that demand is still on the rise.

Although supply increased by 1% in March, it remains historically low. By the end of the month, there were 980,000 homes for sale, a 5.4% increase compared to March 2022. However, new listings are down by 17%, and available homes are staying on the market for longer periods. Inventory is currently 41% lower than pre-Covid levels in 2019.

Economic News

On a positive note, savers can now enjoy the highest returns in 15 years, with top-yielding savings account rates surpassing 5%. However, only 22% of savers are earning 3% or more. Almost half of American adults now have fewer savings than a year ago, and over one-third have more credit card debt than savings.

U.S. Treasury yields experienced a slight decrease last week as Wall Street analyzed the latest economic data and its potential impact on the Federal Reserve's next rate move in May. Currently, 88% of traders expect a 25-basis point hike.

In the UK, the consumer price index increased by 10.1% in March, with British households facing record-high food prices and energy bills. Although lower summer energy prices should help curb inflation, analysts predict that reduced economic growth will be necessary to alleviate other core price pressures.

Regulatory News

In response to the recent collapses of Silicon Valley Bank and Signature Bank, the U.S. Treasury has proposed a framework for identifying issues within the country's financial system. This framework will provide Americans with greater transparency into the Treasury's oversight operations and its process for detecting systemic problems.

The national mortgage delinquency rate has fallen below 3% for the first time on record, ending March at 2.92%. This 53-basis point drop marks the second-largest decline in the past 17 years, with the total number of past-due mortgages reaching its lowest level since April 2000. Delinquencies have decreased in every state.

Lastly, a new poll reveals that 30% of Americans now work from home at least two days a week. This evolving trend will significantly influence the future office market outlook across the nation. While 45% of millennials, 35% of Gen Zers, and 31% of Gen Xers work from home at least twice a week, only 15% of boomers do the same.

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