There is so Much Happening: What Can We Expect in Real Estate?

Filed under: Market Comentary

There is so much data coming in that has the potential to have a big impact on real estate. I want to run through some of these details and explain how it appears to be affecting the industry.

Fed Day: Rates Went Up

Last week was the 2-day Fed meeting. The market was ready for a ¾ point increase in the Fed fund rate, which is exactly what happened. The market liked it because it was expected.

After the Fed announcement, there’s a Q&A session – which is where the damage occurred. On one of the questions, they talked about how they are going to need to raise rates more than initially thought so they can bring inflation down. The market did not like that and it was a bad day for mortgage rates. We saw an increase in mortgage rates that lasted for a few days.

These Fed increases take 3 – 6 months to kick in. We’re on the 4th or 5th increase at this point, which means that some of them haven’t started to have a real impact yet. With the Fed talking about continuing the increases means that the market doesn’t like it because of the potential issues in the future.

Jobs and Unemployment Data

On Friday last week, new jobs data came out. The headline number was better than expected, but the household survey came in quite a bit worse. The household number shows weakness in the employment data. Also, we are starting to hear about layoffs and hiring freezes.

At the moment, the unemployment rate is at a record low. I don’t want to see anyone losing their jobs, but these numbers will continue to change – which could impact the real estate market.

Election Week

Of course, we have all been paying attention to the elections this week. It looks like there is going to be gridlock since the house and senate will be split. Personally, the gridlock idea seems like a good option for the moment because it’s hard to trust either side. So gridlock will make it hard to get anything through.

Honestly, it seems like this political situation is what the market will like.

Consumer Price Index

Tomorrow, we will watch the Consumer Price Index (CPI), which is an important factor in inflation. We’ve seen it coming for months. The number we get tomorrow will be October’s data. It will be month-over-month data, and we are hoping to replace it with something lower that will bring inflation down.

My hope is that we’ve passed the pivot point and already reached max inflation. Hopefully it will set the pace for better months to come.

As always, I’m here to help if you have any questions or thoughts. Reach out to me at any time.

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