Interest rates and the housing market: Interest rates have moderated somewhat as the markets interpret the Federal Reserve’s recent comments on the prospect of rate cuts later this year. The Fed is still expected to cut interest rates three times in 2024.

How will the Fed’s interest rate decisions impact the housing market? Here is a helpful analysis.

As mortgage rates have retreated from their recent highs in 2023 and settled in the 7% area for a 30-year fixed loan, some additional demand has come back into play for the spring home buying season.

Low inventory of available homes for sale and the current interest rate range will likely create a slightly better environment for buyers than last year. Any additional housing market improvement will hinge on rates continuing to fall and supply improving. Both increased supply and lower rates translate into more housing affordability for buyers.

Artificial intelligence and productivity: Last month we declared that the hype around AI is real. To underscore why we believe the increasing adoption of AI into business practices will resonate through the labor, investment and economic markets, give this article a read.

Broadening support in investment markets: 2023 was the year of the “Magnificent 7”, as a select few Mega Cap stocks dragged the market higher. If the “Magnificent 7” were excluded from the S&P 500 last year, it would have returned just 8%, compared to the 26% return when they were included.

The broadening of support and participation is a positive sign for continued progress in the investment markets. It is our belief that a broad rally of many industries, companies and asset classes lends to a more enduring environment for investment gains. The combination of low unemployment, strong wage growth, increasing productivity due to AI and the prospect of lower rates should help propel the investment markets to new highs as we move through 2024.