In a recent article discussing COVID-19 and the Federal Reserve the California Association of Realtors forecasts rate cuts and records an all time high in new construction spending.
Housing/Real Estate Market
Federal Reserve makes emergency rate cut as COVID-19 poses evolving risks: The Fed cut its benchmark rate by half a percentage point, which will lower borrowing costs for homeowners even further. Wells Fargo’s updated its Fed rate forecast and expects a 1% cut by June.
U.S. construction spending rose to an all-time high in January: Construction outlays totaled $1.37 trillion on a seasonally adjusted annualized rate, 1.8% higher than the previous month despite its upwardly revision showing a 0.2% gain. Residential construction climbed 2% as lower interest rates continue to boost the real estate market.
U.S. housing market is undersupplied 3.3 million homes: According to a Freddie Mac’s study, more than half of all states have a housing supply deficit which only gets bigger by about 300,000 units a year. Housing inventory is not keeping up with rising demand.