Housing Market Update

Recent global events continue to influence the housing and mortgage markets. Ongoing conflict involving Iran has contributed to higher energy prices, which can fuel inflation concerns. When inflation expectations rise, mortgage rates often follow suit. Adding to the uncertainty, a stronger-than-expected jobs report has some market observers questioning whether the Federal Reserve will be able to lower rates as quickly as previously anticipated.

If you’ve been following our market updates, you’ve likely seen a recurring theme: geopolitical stability generally supports lower mortgage rates, while conflict and uncertainty can put upward pressure on borrowing costs. As global events continue to unfold, markets will be watching closely to see how conditions evolve and what impact they may have on interest rates in the months ahead

Are Data Centers the Next Boom—or the Next Bust?

Another topic generating discussion is the rapid expansion of data centers across the country. Fueled largely by the growth of artificial intelligence (AI), companies are investing billions of dollars in infrastructure to support increased computing demands.

Some analysts have begun to question whether today’s pace of development is sustainable. If AI adoption fails to meet expectations, could the market eventually face an oversupply of data centers?

One interesting aspect of this debate is geography. Unlike applications that require near-instant response times, many AI workloads can operate from facilities located far from traditional technology hubs. This could allow future data center growth to spread beyond established markets such as Northern Virginia and Silicon Valley.

At the same time, demand for digital services continues to expand. Consider that many groups organizing opposition to new data center projects often rely on platforms such as social media to communicate and coordinate—services that themselves depend heavily on data center infrastructure. Companies like Amazon and Meta have become some of the largest data center operators in the country because consumers and businesses continue to rely on their services every day.

While questions remain about the long-term trajectory of AI, it’s still early in the technology’s evolution. The most transformative applications may still be ahead of us. Whether today’s data center boom ultimately proves excessive or simply the beginning of a larger trend remains to be seen.

As always, we’ll continue monitoring these developments and their potential impact on housing, interest rates, and our local economy.