Welcome to the latest installment of The Full Measure with Kevin Hecht—your destination for the most current economic insights and analyses. Catered to real estate appraisers, agents, and other professionals, this monthly blog series helps you navigate the ever-evolving economic environment. Uncover this month’s economic trends and insights—written from an appraiser’s standpoint—in the following economic recap for September 2023.
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Economic recap September 2023
In a pivotal move, the Federal Reserve maintained its benchmark Fed Funds Rate within a 5.25% to 5.5% range. Although unchanged, clear signals suggest a “higher for longer” rate strategy. The Fed forecasts just one more hike this year and two cuts in 2024, revising down from four. Chair Powell aims to guide inflation to 2%, though leading indicators reveal a possible recession. Historically, recessions bring rate drops. We’ll explore what this means across the housing and commercial real estate sectors.
Housing market overview
In August, the housing market experienced a slight downturn in existing home sales, as reported by the National Association of REALTORS®. However, this general trend didn’t manifest uniformly across all major U.S. regions. For instance, the Midwest observed an uptick in sales, the Northeast saw stable sales figures, whereas the South and West experienced a decline. All four regions saw a year-over-year sales decline.
The total count of existing home sales experienced a 0.7% decrease from July, translating to a seasonally adjusted annual rate of 4.04 million in August. Sales plummeted by a substantial 15.3% when observed from a year-over-year lens.
August concluded with a total housing inventory registering at 1.1 million units, marking a 0.9% decrease from July and a significant 14.1% drop from the previous year. The unsold inventory now represents a…