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New Jobs Report Puts Fed on Track for Interest Rate Cuts

U.S.: A new jobs report was not exactly what economists, or the Fed were expecting. The question now seems to be how much will the Fed cut interest rates when the Federal Open Market Committee meets later this month? A quarter-point or a half-point? Those cuts are expected to loosen borrowing in many sectors of the economy, especially the residential real estate market. On September 6, the U.S. Labor Department said 142,000 jobs were added in August, a bit below the 161,000 that economists had expected. That lower number only added to low figures in July that had sparked concerns about a softening economy.  At the end of the first week of September, a 30-year fixed mortgage stood at around 6.35%.

U.S.: Home prices across the country continue their steady climb. S&P CoreLogic Case-Shiller says in its latest report that U.S. home prices were up in June about 5.4% from June 2023, a slight drop from a month earlier. The number of homes for sale also began to increase during the period. North Texas home prices were only up 2.3% from June 2023, one of the smallest increases in the 20 large metro areas in the survey. But DFW home prices had already recorded some of the country’s largest increases in 2021 and with a high of 31% in April 2022. New York City had the highest home price increase from June to June at around 9%, followed closely by San Diego, Las Vegas and Los Angeles. Portland, Oregon, was the lowest at just under 1%.

TEXAS: Even with the most building permits of any state since 2008, a new report from state officials says that Texas is still short thousands of homes needed to keep up with the demand. The Texas Comptroller’s Office says in the report that the Lone Star State was short by 306,000 homes in 2023. No surprise. From 2021 through 2022, domestic migration to Texas topped 220,000. The DFW area led all U.S. metropolitan areas in population growth and U.S. migration from 2020 and 2023, drawn by company relocations or entrepreneurial opportunities and lower home prices and cost of living. The Texas Real Estate Research Center at Texas A&M University notes that the median price of a single-family home in North Texas was just under $300,000 in 2020 but was close to $400,000 in 2023 and is rising steadily in 2024.

DFW: Celina leaders are investing in the future. The Celina Economic Development Corp. recently paid $13 million for 32 acres near the town square of the northern DFW suburb. The land belonged to the Martinek family, who run a network of grain businesses throughout the area. Any plans for full development will have to wait about five years, since the Martinek family negotiated a lease-back for about six acres of the land. The ECD is expected to work with city officials and look at private-public mixed used projects that could include lodging, entertainment, restaurant and retail space to complement a planned adjacent 30-acre park that would have a trail system and other features.

U.S.: Home insurance rates across Texas have risen by 20% on average over the past  year, blamed on severe weather and other factors. If you thought that was bad, be glad you’re not in California, where some residents may have wished that they had moved to Texas or elsewhere east sooner. Rain, mudslides, wildfires and other disasters seem to cause havoc across the Golden State every year and the crisis problems seem to always flow downward to consumers. Now, Allstate has received state approval for a 34% home insurance rate hike beginning in November for 350,000 California residents living in wildfire-prone areas. Many of those homeowners are stuck. The company stopped writing new insurance policies in 2022, citing numerous challenges, and various other insurance companies have also done the same.

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