Existing home sales in January were reported to be at a seasonally adjusted annual rate of 4.0 million, which is up 3.1% from December but down 1.7% from January 2023. Although the average rate on a 30-year fixed mortgage is down from a recent high of 7.79% in October, they have been between 6.6% and 6.8% so far this year.
The consumer price index, a key gauge of inflation, was 3.1% in January compared to a year earlier. While lower than the 3.4% rate in December, it was higher than the expected rate of 2.9%. Shelter costs, which are the largest component of the average household’s budget, increased by more than 6% on a 12-month basis.
This week’s Consumer Pulse found that 44% of respondents plan on purchasing a home within the next three years. Highlights from this week’s report include:
These findings would indicate that the housing market may continue to perform at a lackluster level until mortgage rates drop significantly.
In addition to housing dynamics, this week’s Consumer Pulse report also looks at inflation. We found that only 25% of respondents believe that their income will keep pace with inflation this year. Home improvement brands and retailers are likely looking at another year of homeowners improving in place and taking on smaller projects as they wait for interest and inflation rates to moderate.
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To get additional insight into what this means for brands and retailers, read the entire study.