the more things change, the more they stay the same In 2024, King County’s total sales count was the second-fewest in 12 years despite a lot of positive developments on the economic front. Even with inflation under control and the Fed cutting interest rates, mortgage rates actually finished the year higher than where they started.
in 2024 were still 25% below the prior 10-year average of 33,156 sales. One reason that might explain the dichotomy between economic trends and real estate activity is that mortgage rates haven’t really budged. According to research by Freddie Mac, both 15-year and 30-year fixed mortgage rates actually finished the year higher than where they began at 6.00% and 6.85%, respectively. Rates have moved even higher to start the new year, with the 30-year rate eclipsing 7% as of January 16th. Although inflation is under control and the Fed has begun easing monetary policy, U.S. Treasury yields, a key input to fixed mortgage rates, have not come down. In the December rennie review we discussed in detail the factors preventing a more meaningful decline in Treasury yields and mortgage rates. Ultimately, the threat of trade wars, mass deportations, and deep cuts to regulations and taxes are inflationary, and higher Treasury yields are a reflection of that. So while much progress has been made on turning the page on inflation, it appears that the next chapter could bring more of the same.
The U.S. economy made considerable progress toward a much-desired “soft landing” in 2024. Although it took some tough medicine to get there—more than two years of rapidly rising and then elevated interest rates—inflation held below 3% for the entirety of the year and continued to move toward its 2% target. With PCE inflation at 2.4% in November (most recently available data), there is still some work to be done. But the Federal Reserve is well within reach of achieving its inflation mandate and restoring price stability. The other key ingredient of a soft landing— avoiding an economic recession—was also realized in 2024. Most recently, GDP grew at an annualized rate of 3.1% in Q3, buoyed by strong household consumption and elevated government spending. Following some softness in the first two quarters of 2022, the American economy has grown at above a 3% annualized pace in five of the past nine quarters, and above 2% in eight of the past nine.
Meanwhile, the labor market also proved quite resilient. Though the unemployment rate finished the year higher than where it started (at 4.1% versus a near-record low of 3.7%), overall labor market conditions remained quite strong. All things considered, the Federal Reserve felt comfortable to begin easing interest rates in September. Through the remainder of the year, it cut a cumulative 100 basis points from its key policy rate, stepping it down from a more than two-decade high of 5.25-5.50% to 4.25-4.50%. While broader economic developments leaned positive in 2024, this did not translate to a meaningful recovery in housing market activity in King County. In fact, at 24,895 closed MLS sales, this was the second-fewest going back 12 years and the continuation of what has been two years of exceptionally slow activity. Relative to 2023, sales were up 10%, but this was more a function of even weaker activity in that year than a market recovery. All told, sales
Information and statistics derived from Northwest Multiple Listing Service. Copyright © 2025 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of January 13, 2025. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E.
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