US Monthly Market Review - January 2024

The U.S. housing market saw modest gains to start the year, with existing home sales increasing 5.9% year-over-year on an annualized basis. This was the first annual sales increase in 31 months, though sales remained below the 300,000-unit threshold for the 16th straight month.

The median home price in California increased 5.0% year-over-year in January, marking the seventh consecutive month of annual price gains. However, the monthly median price declined 3.8% from December to $788,940 due to seasonal factors.  Mortgage rates have moderated since mid-October, which should support continued price growth, though at a more moderate pace. 

In the commercial real estate market, the outlook for 2024 remains muted, with uncertainty around interest rates and the future of office space. Multifamily and neighborhood retail continue to perform well, while the industrial sector is showing signs of softening.

Rising interest rates and construction costs are top concerns, putting pressure on property owners and operators. To address these challenges, some are increasing rents and streamlining financial processes. 

Overall, the real estate market is navigating a period of transition, with pockets of strength and uncertainty across residential and commercial sectors. Moderating mortgage rates and a potential economic slowdown will be key factors shaping the market in the year ahead.