Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Where Are Rates -
Currently we have seen Mortgage Backed Securities bounce of a level of support and rates have improve from their recent highs. Today we are offering:
30 Year Conventional - Mid 6's
15 Year Conventional - Mid 5's
30 Year Jumbo - Low 6's
30 Year FHA - Low 6's
30 Year VA - High 5's
Quick Glance -
Fed Cut -
The Fed cut its key benchmark borrowing rate by 25-bps to a target range of 4.50%-4.75% or an effective federal funds rate of 4.625%.
The 25-bps cut comes two months after the Fed decision to cut 50-bps in September, the first rate cut to occur since hiking eleven times to cycle high target range of 5.25%-5.50%. The decision to cut was not impacted by the results of the presidential election as participants had been anticipating a 25-bps rate cut for some time.
Overall, the Fed chairman stated that the committee was, “feeling good about economic activity” and that the move to cut rates today was to bring monetary policy into better balance with their dual mandate. During the press conference Powell refused to make any comments on Trumps election or the fiscally policies that his administration is likely to levy.
Yet, it's noteworthy that the Fed's statement tracker does highlight a key removal of the words, “confidence that inflation is moving sustainably toward 2 percent”. This removal comes as both inflation expectations and real yields have increased since the Fed began cutting in September.
Reading between the lines, it seems that while the impact of fiscal policy implications may not show up for some time and the Fed is unlikely to make any moves preemptively, these are new challenges that must be considered by the committee. As of now it's a wait and see approach, i.e. what the policy is, the size and the magnitude. Once clarity takes shape then the FOMC can feed those developments into their models.
Markets React -
While the Fed plays the wait and see game, markets are already beginning to act.
The S&P 500 bounced off it's 50-day moving average and support level at 5,700 while busting through the 15-day moving average to achieve a new all-time high. It's clear that participants see Trumps fiscal stimulus policies as a positive for corporate earnings. Additional “risk-on” assets such as small cap stocks and crypto also broke to upside as Trump is seen as a pro-crypto president and the Fed continues to provide an accommodative environment for the time being leading to asset inflation.
Summation of Bond & Stock Markets -
Meanwhile, the bond market has started to do some of the Fed's job for it. While the Fed controls the short-end of the yield curve, the mid-to-long-end of the yield curve has started to rise since the Fed's first rate cut. Market participants clearly see inflation expectations remaining elevated going forward as the economy appears set for further growth, which was further supported by the jobs report last week. Remember, bad news for economic growth is good news for yields/rates heading lower. As of now the 2/10-year spread is positive meaning one of the key recession or economic slowdown indicators is no longer flashing as a concern for market participants, while we await the 3-month/10-year spread to uninvent as well.
Adding all of the above developments together means that anyone with exposure to the stock market is cheering as their portfolios rise (inflate) while consumers that continue to borrower have little to cheer. Rates on credit cards, car loans, and personal loans have barely budged, while mortgages have only gotten more expensive.
Powell touched on consumers not feeling the strength of the economy on their wallets stating that, “inflation stays with you and does not come back down." It merely slows. Consumers will not feel improvement on their wallets until and unless wage gains consistently grow faster than inflation, which is happening, but any meaningful impact will take patience to truly feel.
Home Renovations Be Careful -
Here are the items that give you your best ROI -
Rising Texas Home Inventories -
Cities in Texas with the most excess supply:
Austin: 42% inventory surplus
Dallas: 39% surplus
San Antonio: 38% surplus
This rising inventories should lead to lower prices for buyers entering the market.
Always available ITT or DM to answer questions.
Beat Florida!
Have an amazing weekend!
Hook 'Em!
MH
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Where Are Rates -
Currently we have seen Mortgage Backed Securities bounce of a level of support and rates have improve from their recent highs. Today we are offering:
30 Year Conventional - Mid 6's
15 Year Conventional - Mid 5's
30 Year Jumbo - Low 6's
30 Year FHA - Low 6's
30 Year VA - High 5's
Quick Glance -
- The Fed cut its key benchmark borrowing rate by 25-bps to a target range of 4.50%-4.75% or an effective federal funds rate of 4.625%. Powell remained tight lipped when pressed on the potential frequency and magnitude of rate decisions in the future along with whether their previous projections still held weight.
- Markets had widely expected the rate reduction and Powell's comments at the press conference did little to cause waves and unwind any of the meaningful moves that took place in the stock market following Trump's win. However, the good news is that despite the equity markets not giving back any gains, bond yields did ease with the 10-year essentially returning to where it was at market close on election day.
- These two latest developments can be summed up as a positive in the short term for both the equities market and short-term yields in the bond market. Yet, medium to long duration bond yields, such as the 10-year treasury and therefore mortgage rates will remain volatile as market participants must weigh economic growth and inflation expectations that suddenly appear more uncertain. In the long run the U.S. economy will be directly impacted and monetary policy indirectly impacted by the fiscal policies that starts to take shape under the Trump administration.
- Be careful when making home renovations - choose wisely.
- Texas Home Inventories are rising - hopefully will encourage buyers to enter the market.
Fed Cut -
The Fed cut its key benchmark borrowing rate by 25-bps to a target range of 4.50%-4.75% or an effective federal funds rate of 4.625%.
The 25-bps cut comes two months after the Fed decision to cut 50-bps in September, the first rate cut to occur since hiking eleven times to cycle high target range of 5.25%-5.50%. The decision to cut was not impacted by the results of the presidential election as participants had been anticipating a 25-bps rate cut for some time.
Overall, the Fed chairman stated that the committee was, “feeling good about economic activity” and that the move to cut rates today was to bring monetary policy into better balance with their dual mandate. During the press conference Powell refused to make any comments on Trumps election or the fiscally policies that his administration is likely to levy.
Yet, it's noteworthy that the Fed's statement tracker does highlight a key removal of the words, “confidence that inflation is moving sustainably toward 2 percent”. This removal comes as both inflation expectations and real yields have increased since the Fed began cutting in September.
Reading between the lines, it seems that while the impact of fiscal policy implications may not show up for some time and the Fed is unlikely to make any moves preemptively, these are new challenges that must be considered by the committee. As of now it's a wait and see approach, i.e. what the policy is, the size and the magnitude. Once clarity takes shape then the FOMC can feed those developments into their models.
Markets React -
While the Fed plays the wait and see game, markets are already beginning to act.
The S&P 500 bounced off it's 50-day moving average and support level at 5,700 while busting through the 15-day moving average to achieve a new all-time high. It's clear that participants see Trumps fiscal stimulus policies as a positive for corporate earnings. Additional “risk-on” assets such as small cap stocks and crypto also broke to upside as Trump is seen as a pro-crypto president and the Fed continues to provide an accommodative environment for the time being leading to asset inflation.
Summation of Bond & Stock Markets -
Meanwhile, the bond market has started to do some of the Fed's job for it. While the Fed controls the short-end of the yield curve, the mid-to-long-end of the yield curve has started to rise since the Fed's first rate cut. Market participants clearly see inflation expectations remaining elevated going forward as the economy appears set for further growth, which was further supported by the jobs report last week. Remember, bad news for economic growth is good news for yields/rates heading lower. As of now the 2/10-year spread is positive meaning one of the key recession or economic slowdown indicators is no longer flashing as a concern for market participants, while we await the 3-month/10-year spread to uninvent as well.
Adding all of the above developments together means that anyone with exposure to the stock market is cheering as their portfolios rise (inflate) while consumers that continue to borrower have little to cheer. Rates on credit cards, car loans, and personal loans have barely budged, while mortgages have only gotten more expensive.
Powell touched on consumers not feeling the strength of the economy on their wallets stating that, “inflation stays with you and does not come back down." It merely slows. Consumers will not feel improvement on their wallets until and unless wage gains consistently grow faster than inflation, which is happening, but any meaningful impact will take patience to truly feel.
Home Renovations Be Careful -
Here are the items that give you your best ROI -
Rising Texas Home Inventories -
Cities in Texas with the most excess supply:
Austin: 42% inventory surplus
Dallas: 39% surplus
San Antonio: 38% surplus
This rising inventories should lead to lower prices for buyers entering the market.
Always available ITT or DM to answer questions.
Beat Florida!
Have an amazing weekend!
Hook 'Em!
MH
