top of page

No Respite for the Housing Market

David Halseth

For week ended 1/25/2025



Back in the Saddle


Good to be back in the saddle and providing you with some entertainment—and hopefully a bit of insight—for your Monday morning. This week’s edition was particularly challenging to craft, as significant economic and market news had to compete with the presidential transition and a flurry of headline-grabbing executive orders. Nevertheless, I dug a little deeper to bring you some valuable updates.


Housing Market Hits Historic Lows


Thanks to mortgage rates that continue to defy the Federal Open Market Committee's (FOMC) prescribed path of lowering baseline rates, U.S. home sales in 2024 fell to their lowest level in 30 years. Yes, you read that correctly: existing homes experienced their slowest turnover since 1995.

Since late 2022, the 30-year fixed mortgage rate has hovered stubbornly between 6% and 8%, making homeownership prohibitively expensive for most Americans. According to Wells Fargo, existing home sales in December were 20% below the average pace of 2019. And when you factor in that the U.S. population has grown by approximately 25% since the mid-1990s, these numbers become even more striking.


Markets Defy Expectations


As we close out the first month of 2025, domestic stocks continue to defy valuation metrics, posting a robust 3.8% gain month-to-date. Commodities and foreign stocks are joining the rally, rising 5.0% and 3.5%, respectively.

In the previous edition of Monday Morning Musings, I titled it “Pity the Bond Market Investor,” and that sentiment still holds true. Bonds have eked out a mere 0.1% return month-to-date as inflation shows no signs of cooling. Over the past year, cash has outperformed bonds by a significant 220 basis points.


Looking Ahead


This week, the FOMC meets once again, and we’ll also see the initial reading of Q4 GDP—a key data point to watch.

With that, enjoy the winter weather and your morning brew of choice. Here's to a productive week ahead!






Interesting data point of the week.


Source: Visual Capitalist
Source: Visual Capitalist




47 views0 comments

Recent Posts

See All

Comments


bottom of page