Weekly Economic Trends and Indicators

The Headlines:

The median home sale price in the Quad Cities metro area was $205,000 in July according to Redfin. This was an increase of 6.8% over the previous year. Nationally, the median home sale price was $444,000, an increase of 1.4% over last year. There were 461 home sales in July in the metro area, up from 439 in July of last year. In July, there was 1.8 months supply of inventory for single family homes in the Quad Cities, which was the same as a year ago.

The Details:

Median home sale price growth in the Quad Cities has outpaced the national average in recent months. This is a reversal from most of the last decade up until 2023. Year-over-year sales growth has also been very positive this year. The 1.8 months supply of inventory is well below the national average of 3.1 months. Locally, inventory has ranged between 1.4 and 2.9 months since 2023 while nationally the range has been 1.9 to 4.0 months over the same time period.

The Quad Cities metro area continues to be a very affordable housing market even as the gap between median sale prices has closed slightly over the last couple of years.

The Context:

Mortgage interest rates are one of the most important drivers of activity in the housing market. Mortgage rates impact the affordability of homes by their effect on monthly payments. As the Federal Reserve began tightening monetary policy in 2022, mortgage rates followed, spiking to nearly 8% by late 2023. Since then there has been some easing when the Fed began lowering the policy rate late last year. As the Fed’s rate cutting campaign stalled, so did the decline in mortgage rates.

However, the Fed’s monetary policy decisions are not the only determinant of mortgage rates. Expected inflation also affects rates. With increased uncertainty about both inflation and the Fed’s upcoming rate decision, mortgage rates have been in a holding pattern. As mortgage rates have hovered around 6.5% to 7% for the better part of a year, the national housing market has been gradually slowing down. Even so, individual markets are influenced by both national and local factors. Strong demand locally has offset the higher mortgage rates and helped boost activity in the region.

Next week: Tariff update