December 13, 2024

• The Realtor.com® economics team video update gives you the relevant economic and real estate information you need to know each week every Friday to navigate the housing market as a homebuyer, home seller, or industry professional.
• For the week ending December 13, Realtor.com® Chief Economist Danielle Hale recaps the latest economic data which focused on inflation. 
• Prices edged up according to both the Consumer Price Index and Producer Price Index. While falling rents are helping to slow the rate of shelter inflation, core inflation remains elevated.
• Danielle discusses what this means for next week’s Fed meeting, in light of recent labor market trends.
• Mortgage rates dropped again to 6.6%, a factor helping to bolster consumer home purchase sentiment. Consumers expect additional mortgage rate declines, in line with the modest declines anticipated in the Realtor.com 2025 Housing Forecast.
• Lower mortgage rates are good for both buyers and sellers. In Realtor.com weekly data, new listings continue to edge up.
• In November, the Realtor.com Hottest Housing Markets report showed strength in the Northeast with the hottest market in Springfield, Massachusetts and the biggest mover among large markets–the New York metro area–both hailing from that region.
• Meanwhile, we released the Realtor.com Top Housing Markets for 2025 report which found that market strength in the year ahead is likely to be found in the Sun Belt.

VIDEO TRANSCRIPT:

• I’m Danielle Hale, Chief Economist at Realtor.com®. And here’s what you need to know about the economy and housing market this week as the winter holidays approach.
• Inflation indicators highlight just how challenging getting all the way to the Fed’s 2% target may be. Consumer price inflation edged up as falling energy prices couldn’t fully offset increases in shelter and other prices. Core inflation–a measure of underlying price pressure also remained elevated, and producer prices showed similar upward pressure. 
• One bright spot–although shelter prices still moved up, they are decelerating as asking rents continue to fall.
• Despite the pick-up in inflation, I still expect another quarter point rate cut in next week’s Fed meeting. With unemployment ticking up the Fed is likely to aim to stay on its recent path, but I also expect the projections and statement language to open the door to a much slower pace of cuts in 2025, something investors are also looking toward. 
• Nevertheless, mortgage rates eased this week, dropping to 6.6%. 
• Improvement in mortgage rates and the outlook for lower rates ahead seems to have bolstered home purchase sentiment, which ticked up for a fourth straight month. The share of consumers who expect mortgage rates to fall was a survey-high 45%. The Realtor.com 2025 Housing Forecast also anticipates somewhat lower mortgage rates by this time next year.
• Lower mortgage rates are good not only for buyer demand, but also for sellers. In Realtor.com weekly data, we saw that, despite volatility from the Thanksgiving holiday, new listings continue to edge up. Interestingly, sellers are meeting a slower-moving housing market by moderating their asking prices.
• Finally, there are two top-10 lists worth covering. The first is our monthly hottest housing markets where we highlight the areas where current demand outpaces current supply. The number 1 hottest market in November was Springfield, Massachusetts while among the largest markets in the country, the New York metro area was the most improved.  Highlighting the strength of the Northeast region.
• The second is our Top Housing Markets for 2025. In this report, we break down the markets that are expected to see the largest increase in real estate transactions, propelled by both sales and home price growth. In 2025, low-cost, Sun Belt markets where construction has been more robust are expected to be the top performers. Top markets are also home to younger populations and recent buyers more often used mortgage products like VA and FHA loans which permit lower down payments, to help open the door to homeownership.
• Of these, Colorado Springs is the expected number one.
• You can find the rest of the rank ordered list and all the details, including full reports and our housing data for download, at realtor.com/research.  You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.

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