California Market Update

In January, despite slightly higher-than-expected inflation at the end of the previous year, recent headlines suggest positive trends. Consumers perceive a slowdown in overall price growth, stable rates, and increased homebuyer activity. December’s inflation rose 0.3% month-over-month and 3.4% year-over-year, driven by shelter costs. Core CPI, excluding food and energy, decreased to 3.9%. Short-term inflation expectations fell to 3.0%, indicating a cooling trend. 

Mortgage rates rose in early 2024, affecting the 30-year fixed-rate mortgage, but recent data hints at a reversal. Foreclosures increased in 2023 but remained below pre-pandemic levels.

Small business optimism rose in December, with the NFIB index reaching 91.9, reflecting improved sales expectations despite challenges in inflation and hiring. Despite the rebound, the index remains below the historical average for the 24th consecutive month.

Source: California Association of REALTORS®