Consumption High

Consumption High

A quick dive on the latest trends in the rental market, property insurance, retail sales, home equity, and mortgage refinancing -

Rental Market Trends

The rental market is showing interesting dynamics across different segments:

  • The median asking rent in the 50 largest metros was $1,753 in August 2024, marking the 13th consecutive month of rent declines.
  • Despite the recent decline, rents are still $293 higher than in 2019.
  • High-end single-family rentals saw rent increases in July 2024, while low-end rentals experienced price declines...a tale of two markets.

Property Insurance Update

The property insurance landscape is evolving:

  • For the first time since 2017, the average U.S. property insurance rate decreased by 0.94% in Q2 compared to the previous year.
  • The insurance industry continues to face challenges from extreme weather and inflation.
  • Allstate Insurance received approval to raise some insurance premiums by up to 34% in California, but the hike includes discounts for homeowners who take steps to reduce wildfire risks.

Retail Sales and Consumer Spending

Recent data shows resilience in consumer spending:

  • U.S. retail sales rose by 0.1% in August, reaching $710.8 billion, despite expectations of a decline.
  • Year-over-year retail sales grew by 2.1%.
  • Online sales surged by 1.4%, while health and personal care outlets saw a 0.7% rise.

Interesting fact: In the last three recessions, consumption never declined during the economic downturn.

Home Equity and Mortgage Trends

Homeowners are seeing positive trends in equity:

  • U.S. homeowners with mortgages experienced an 8.0% year-over-year increase in home equity, representing a collective gain of $1.3 trillion.
  • The average increase per borrower was $25,000 since the second quarter of 2023.
  • The number of homes in negative equity decreased by 15% year-over-year.

Climbing equity has eased overall leverage in the market. Home foreclosures can destabilize home prices, while fewer foreclosures can boost buyer confidence.

Refinancing Opportunities

As interest rates evolve, refinancing opportunities may arise:

  • Over 80% of mortgage holders currently have rates below 5%.
  • If 30-year fixed mortgage rates fall below 5%, we may see a surge in refinancing activity.
  • Homeowners with expiring adjustable-rate mortgages (ARMs) may want to consider locking in longer-term rates as the 30-year fixed rate mortgage trends towards 6%.

Other Noteworthy Updates

  • A new ordinance in Santa Cruz County will permit home kitchens for commercial use, opening up opportunities for home-based food businesses.  This ordinance is already in effect in Monterey County, and it was made possible by CA AB 626.

To view or add a comment, sign in

More articles by Jonathan Balog

  • Monterey Peninsula Home Sales: TLDR

    Monterey Peninsula Home Sales: TLDR

    I’ve compiled statistics for single-family homes on the Monterey Peninsula, focusing on 2024 compared to years prior…

  • Protecting Your Property Value: Foreclosures and NIMBYs

    Protecting Your Property Value: Foreclosures and NIMBYs

    As 2024 draws to a close, the real estate landscape presents a paradoxical picture: while mortgage debt has soared to…

  • Giving Credit Where It's Due

    Giving Credit Where It's Due

    Below we will take a quick look at several topics from mortgage trends and housing inventory to inflation and economic…

  • When Maintaining High Ground Isn't High Enough

    When Maintaining High Ground Isn't High Enough

    Recently, I had a sobering conversation with a homeowner from East Tennessee whose life was upended by Hurricane…

  • Falling into the Market

    Falling into the Market

    For those who were in the area this past week - it officially feels like Fall on the Monterey Peninsula. If the saying…

  • House Arrest

    House Arrest

    A quick dive on several important topics including national and local housing market trends: National Housing Market…

    1 Comment
  • Invest Smart: Estoppel Certificates

    Invest Smart: Estoppel Certificates

    Are you considering an investment in a tenant-occupied property? Well, there is something you should know about: the…

  • Monterey Peninsula Housing Inventory Trends

    Monterey Peninsula Housing Inventory Trends

    The Monterey Peninsula real estate market is showing some interesting trends. As in previous years, the number of…

    1 Comment
  • Going buy the numbers

    Going buy the numbers

    Housing Market Trends During Economic Downturns When considering a home purchase in uncertain economic times, several…

    1 Comment
  • Summer Housing Trends in Monterey County

    Summer Housing Trends in Monterey County

    The summer months bring a surge of activity to Monterey County, with more tourists, events, and houses on the market…

Insights from the community

Others also viewed

Explore topics