The U.S. economy closed 2024 on a strong note, with GDP growth exceeding initial estimates and job gains remaining steady. Consumer spending continued to drive economic expansion, though the labor market showed signs of cooling. Inflation, while lower than its 2022 peak, remains above the Federal Reserve’s 2% target, suggesting that interest rates may stay elevated for longer than previously expected.
The Federal Reserve kept its benchmark rate unchanged, and mortgage rates have now dipped below 7%, offering some relief to buyers. Freddie Mac reports that recent data shows that purchase applications modestly exceeded those from 2024 — an encouraging sign of resilient demand.
Consumer confidence has become somewhat uncertain, as stock markets remain high yet volatile. Additionally, California’s recent devastating wildfires have inflicted significant human and financial costs that will take years to fully assess, further complicating the broader economic outlook.
In San Francisco, the typical new year rebound is in full swing. New listings and contracts have bounced back from December lows, and while median home prices have dropped 9% year-over-year, demand remains strong. Single-family home sales have surged by 31%, condo sales have risen 13%, and the median days on market for single-family homes has fallen by 19 days—indicating heightened competition.
Looking ahead, we expect the market to accelerate rapidly in the coming months as the spring season gains momentum.
