A Look Into The Markets: June 2024
June 17, 2024

A Look Into The Markets: June 2024

"The home should be the treasure chest of living." - Le Corbusier


Purchasing a home and moving to a new neighborhood are significant milestones for many. In this issue, we cover these topics along with the following:


What to Watch: In just the past two to three weeks, the U.S. economy has seen a slowdown in economic and job growth. Slowing growth in both sectors usually pushes borrowing costs lower and could continue in the months ahead if this trend lingers.


Housing: When purchasing a house, it's as important to consider the neighborhood you're moving into as it is the actual home.


Home improvement: With energy-efficient products and services increasing in popularity, more homeowners are taking on eco-friendly home improvements to save money and add value.


Q&A: Home inspections are critical to ensure you're purchasing a sound home. There are several important factors you'll want to assess.

What to Watch


Economic Slowdown and Job Growth Decline


What to Watch


In just the past two to three weeks, the U.S. economy has seen a slowdown in economic and job growth. Slowing growth in both sectors usually pushes borrowing costs lower and could continue in the months ahead if this trend lingers.


Gross Domestic Product (GDP), or economic growth, for Q1 2024 fell to 1.3% after a 4.9% rise in Q3 2023 and 3.4% for Q4 2023, which was the smallest increase in almost two years. So, growth is decelerating. Forecasts for growth in the current quarter aren't much better, as evidenced by the Atlanta Fed at 1.8% while the New York Fed sees it at 1.7%.


Car sales fell in Q1 as auto dealers had to lower prices to fuel sales hurt by high interest rates. Consumer spending, which makes up two-thirds of economic activity, slowed due in part to ongoing inflation pressures, which weighed on GDP. If the forecasts of around the mid-1% range hold true for Q2 2024, spending won't be much better. However, heading into the summer, consumers could be spending more given an increase in outdoor activities.


The Federal Reserve's Beige Book Survey, a qualitative review of economic conditions, recently showed that the economy was growing in May, but headwinds from high interest rates are slowing consumer spending. The keywords "are slowing consumer spending."

The job market has seen some cooling over the past month or so, with the closely watched manufacturing sector in the spotlight.


The May reading for the Institute of Supply Management (ISM) Manufacturing Index contracted for the second consecutive month, meaning that people are losing jobs. The April Jobs Report was lower than expected, and while May exceeded expectations, within the numbers it showed many weaknesses. The Job Openings and Labor Turnover Survey (JOLTS) recorded the fewest wanted signs in three years. 


Bottom line: Interest rates still have pressure from heavy note and bond supply from the Treasury, along with inflation pressures, which hurt rates. Fed Chair Powell has stated that the Central Bank will not have an appetite to cut rates unless it sees an unexpected weakness in the labor market. We may very well be seeing that unexpected weakness happening now.


Source: Mortgage Market Guide

Housing News


Economic Slowdown and Job Growth Decline

In just the past two to three weeks, the U.S. economy has seen a slowdown in economic and job growth. Slowing growth in both sectors usually pushes borrowing costs lower and could continue in the months ahead if this trend lingers.


Gross Domestic Product (GDP), or economic growth, for Q1 2024 fell to 1.3% after a 4.9% rise in Q3 2023 and 3.4% for Q4 2023, which was the smallest increase in almost two years. So, growth is decelerating. Forecasts for growth in the current quarter aren't much better, as evidenced by the Atlanta Fed at 1.8% while the New York Fed sees it at 1.7%.


Car sales fell in Q1 as auto dealers had to lower prices to fuel sales hurt by high interest rates. Consumer spending, which makes up two-thirds of economic activity, slowed due in part to ongoing inflation pressures, which weighed on GDP. If the forecasts of around the mid-1% range hold true for Q2 2024, spending won't be much better. However, heading into the summer, consumers could be spending more given an increase in outdoor activities.


The Federal Reserve's Beige Book Survey, a qualitative review of economic conditions, recently showed that the economy was growing in May, but headwinds from high interest rates are slowing consumer spending. The keywords "are slowing consumer spending."

The job market has seen some cooling over the past month or so, with the closely watched manufacturing sector in the spotlight.


The May reading for the Institute of Supply Management (ISM) Manufacturing Index contracted for the second consecutive month, meaning that people are losing jobs. The April Jobs Report was lower than expected, and while May exceeded expectations, within the numbers it showed many weaknesses. The Job Openings and Labor Turnover Survey (JOLTS) recorded the fewest wanted signs in three years. 



Bottom line: Interest rates still have pressure from heavy note and bond supply from the Treasury, along with inflation pressures, which hurt rates. Fed Chair Powell has stated that the Central Bank will not have an appetite to cut rates unless it sees an unexpected weakness in the labor market. We may very well be seeing that unexpected weakness happening now.


Source: Mortgage Market Guide

Home Improvement


Top 10 Factors To Consider When Choosing a Neighborhood


Where you choose to buy a house is one of the biggest decisions you'll make alongside purchasing the home itself. Here are 10 factors you'll want to consider when choosing your new neighborhood.


Location: Overall accessibility, transportation options, and even the climate can vary between locations. For this reason, it's important to weigh your options if you're deciding between areas with significant differences.


Budget: Start your search in neighborhoods with housing prices that fit solidly within your budget without stretching you too thin. You'll also want to consider any additional costs associated with your home purchase, such as homeowners' association or other fees if you're considering a condo or deed-restricted community.


Costs: Purchasing a home may also come with additional costs beyond your mortgage. Property taxes, utilities, groceries, entertainment, and the overall cost of living can vary significantly between neighborhoods.


Crime and safety: Crime and safety ratings should be on your list. Research local emergency and community resources, such as medical, fire, and police services, to make sure you have the security you need in a neighborhood.


Schools: If you have kids, you'll also want to do your research on schools. Assess rankings, available programs, and extracurriculars, along with the district's reputation and individual schools. You might also look at different types of schools, including public, charter, or private schools.


Amenities: Make a checklist of your must-have amenities, including shopping, dining, entertainment, parks, and recreation options. As you look for your new home, go down the list to see what's available in each neighborhood.


Proximity: Proximity to family, friends, school, and work is another factor to consider. Think about walkability, driving time, fuel costs, and how close you want to be to important amenities.


Community environment: Get a feel for the overall community. Friendly neighbors and a diverse population can add to the appeal for many homebuyers. Consider the noise levels and overall comfort of the area you're looking at.


Pet-friendliness: For homebuyers with pets, an area with clean and safe walking paths, parks, and other pet-friendly amenities are top priorities. It's also important to consider any potential breed restrictions.


Value and growth: Do some research on the potential value and growth for the neighborhood. This is important because you want to buy in an area with strong anticipated appreciation in case you decide to sell your home in the future.



Weighing these factors against your priorities and budget will help you find the neighborhood that's the perfect fit for years to come.


Sources: Statefarm.com, Tchabitat.org

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