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CoreLogic’s April Price Index Up 5.3% Annually

Home prices across the U.S. rose 5.3% year-over-year and 1.1% month-over-month in April, according to CoreLogic’s Home Price Index (HPI). This marks six consecutive months of annual gains above 5% and 147 months of continuous year-over-year growth. CoreLogic predicts that the pace of price growth will remain above 5% for most of 2024 but will slowly decelerate. April’s price growth was consistent with March, although month-to-month growth slowed slightly. The increase in mortgage rates has cooled spring homebuyer demand, pulling monthly gains below the average. Factors like fluctuating rates and rising homeownership costs, including insurance and homeowner association fees, contribute to the slowdown.

In April, no state saw a year-over-year price decline. The Northeast showed significant strength, with New Hampshire and New Jersey leading with 12% and 11% growth, respectively. Among major metros, San Diego experienced the highest year-over-year rise at 9.9%. CoreLogic expects price growth to cool further by the end of the year, projecting an annual growth rate of 3.4% by April 2025. The double-digit yearly gains seen in some states are expected to diminish, with only a few states likely to see price increases above 6%.

Attom: Q1 Mortgage Activity Hits 24-Year Low

In the first quarter of 2024, around 1.28 million mortgages for residential properties with up to four units were issued in the U.S., marking a 6.8% decrease from the previous quarter. This decline is part of a broader trend, with 11 drops in the past 12 quarters, bringing mortgage issuance to its lowest since 2000. Total residential lending activity is down 4.8% year-over-year and has plummeted 69.3% from the peak in 2021. Every major category of residential lending saw declines, with purchase loans dropping 9.9%, refinances slipping 1.9%, and home equity credit lines falling 9% from the previous quarter.

Purchase loans, while still making up the largest share of mortgages at over 40%, have decreased significantly, contributing to the third consecutive quarter of declining purchase market share. Though gaining share, refinance activity remains far below its early 2021 peak. The dollar volume of residential mortgages also fell, totaling $405.6 billion in Q1 2024, down 4.8% from Q4 2023 and 4.5% from Q1 2023. This figure is less than a third of the $1.29 trillion high during the pandemic boom in 2021. Despite these declines, Attom CEO Rob Barber expressed cautious optimism for a potential rebound in the second quarter, driven by the home-buying season. However, any increase is expected to be limited due to persistently high interest rates and a low housing supply.

Fed Officials Lower Rate Forecasts, Signal One ’24 Cut

Federal Reserve officials decided to maintain the benchmark federal funds rate at 5.25% to 5.5%, the highest in two decades. Still, they signaled only one rate cut for this year compared to the three cuts forecasted in March. They now anticipate four rate cuts in 2025 instead of three. Fed Chair Jerome Powell highlighted that recent inflation readings have been more favorable but stressed the need for more positive data to move towards the 2% inflation target confidently. Despite some officials differing on the best path for borrowing costs, the overall tone suggests a cautious approach towards rate cuts, given the current economic conditions.

The Federal Open Market Committee, in a reassuring move, adjusted its statement to acknowledge modest progress toward the 2% inflation goal, a contrast to previous statements highlighting a lack of progress. Core consumer price index data released earlier showed slower inflation, contributing to the Fed’s cautious optimism. Despite other countries like the European Central Bank and Bank of Canada already cutting rates, U.S. central bankers are debating whether the neutral rate has risen since the pandemic, implying that current monetary policies might not be as restrictive as intended. The Fed also plans to continue reducing its balance sheet at a slower pace, indicating ongoing efforts to manage economic conditions carefully.