Economic insights: July/August 2024

En el sector inmobiliario, es crucial estar al tanto de las tendencias del mercado, por supuesto, pero también de las de la economía mundial, que afecta no sólo al sector inmobiliario, sino a la mayoría de los aspectos de la vida cotidiana.

Manténgase al día con Luxury Portfolio International aquí, donde la Dra. Marci Rossell, economista jefe de Leading Real Estate Companies of the World, comparte sus cinco ideas principales del mes pasado.

1. Global IT outage impact

A significant IT outage, which began in the U.S., led to global disruptions.

Despite not being a cyberattack and being relatively brief, this incident underscored the vulnerabilities inherent in our interconnected digital economy and the risks associated with technological advancements.

Dr. Rossell points out that although our interconnectedness makes it impossible to completely avoid risks, it doesn’t diminish the substantial benefits that technological progress offers.

2. Labor market cooling

The June unemployment report showed job growth, but also an unemployment rate at 4 percent, up from the 3.4 percent low in March 2022 (when the Federal Reserve began to raise rates).

This gradual increase reflects the impact of the Federal Reserve’s ongoing tight monetary policy, which began over two years ago. Dr. Rossell notes the labor market’s loosening from its super-tight levels two years ago is one of the ways that monetary policy is impacting the economy.

3. Federal Reserve rate cut predictions

No changes were expected from the Federal Reserve at their end-of-July meeting.

However, a rate cut of 25 basis points is predicted for September, provided inflation continues its downward trajectory. This forecast is based on the current economic indicators, which show a positive trend with falling commodity prices and a global shift in monetary policy.

Notably, other central banks have already begun reducing rates, signaling a broader trend towards easing monetary conditions.

Dr. Rossell emphasizes that this anticipated rate cut could be pivotal in stimulating economic growth while managing inflation. 

4. Housing market dynamics

Mortgage rates are falling — down to 6.77 percent for the week of July 18, per Freddie Mac — in anticipation of the September rate cut.

Additionally, existing home inventory has increased by 35.8 percent year-over-year as of mid-July. Dr. Rossell attributes this to a diminishing “lock-in effect.” Homeowners with low mortgage rates from previous years are now moving despite higher current rates.

However, median home prices continue to rise and new construction remains stagnant, presenting affordability challenges. 

5. Global trade and economic fragmentation

There is a growing fragmentation in global trade, particularly between Eastern and Western economies. Dr. Rossell points out the implications of increasing tariffs and economic separation, which could affect global consumers and the real estate market in the coming year.

Como economista jefe de LeadingRE, la Dra. Marci Rossell explora cómo las economías globales, las políticas y la política afectan a la industria inmobiliaria y a nuestra vida cotidiana, ya sea directa o indirectamente. La Dra. Rossell tiene un historial probado de análisis del mercado económico como ex economista jefe de CNBC y economista corporativa de OppenheimerFunds.