Quotes from the news wire:
This expectation is becoming more visible in the growing number of companies resorting to layoffs as a hedge against a potential economic slowdown, people who are laid off pull back on spending, and even those who are still employed may begin to do the same due to worries about losing their job, thus potentially sending consumer spending into a downward spiral.
While the Fed signaled that it will continue to raise rates this year, the moves are expected to come in 25 basis point increments, a less aggressive tightening than what we saw in 2022, the central bank is acknowledging that it sees its monetary actions having a tangible effect on inflation. The CPI data out this week seems to confirm the bank’s views.
With interest rates still running well below the 7% range we saw in the fall, the psychological shock of the 2022 rate jump is wearing off for buyers, leading to a favorable adjustment in expectations.
Mortgage rates are likely to continue moving up and down in a narrow range for the next few weeks.
On the one hand, investors have been expecting the economy to fall into a recession following the Fed’s rate hikes, assuming that higher borrowing costs will make it ever more challenging for consumers to continue spending on credit, on the other hand, the combination of a strong job market and pandemic savings mean that Americans have maintained a steady consumption pace even as they switched their focus from goods to services.
Most recent indicators point to a still-resilient economy.
For today’s buyer of a median-priced home, the down payment amount is lower than it would have been last summer, while that is positive news, affordability remains a primary challenge, especially for first-time buyers.
For buyers who find a home to purchase, shopping for a mortgage with multiple lenders to secure the lowest rate and fees could result not only in a lower monthly payment, but also in tens of thousands of dollars saved over the life of the loan.
The Freddie Mac fixed rate for a 30-year loan has been moving up and down in the 6% to 7% range since September 2022 when it crossed the 6% threshold for the first time in 14 years, mortgage rates have mirrored the volatility in the 10-year Treasury, as investors wrangle mixed expectations amid an inflow of new economic numbers.
We may have to wait until the start of the spring shopping season for more clarity on the direction of housing markets this year, especially as both buyers and sellers are pulling back from the marketplace.
With the 30-year mortgage rate at 6.4%, the buyer of a median-priced home is looking at a monthly payment that is 60% higher than last year.
With a Federal Reserve committed to bringing inflation down, investors expect business investments and consumer spending to pull back, however, with most Americans still employed and seeing modest pay gains, the pullback in spending has yet to meaningfully materialize.
Markets like Manchester, New Hampshire; Columbus, Ohio; Fort Wayne, Indiana; Hartford, Connecticut; Lancaster, Pennsylvania; or Topeka, Kansas are still seeing homes change hands as buyers from more expensive locations are lured by solid local economies and median prices, which in some cases are still below $300,000.
With real median household incomes remaining relatively unchanged, many first-time homebuyers are finding the door to homeownership is closed for this season.
Many sellers are recognizing the shift in market conditions and are responding by cutting their asking prices, these changes are coinciding with the time of the year when buyers have historically found the best market conditions to find a bargain.
Core inflation remains stubbornly elevated, putting pressure on Federal Reserve to maintain an aggressive stance on monetary tightening, markets are keeping a close eye on the central bank's meeting next week, expecting another 75-basis-point increase in the policy rate, if not a 100-basis-point jump.
Financial markets continue to react to the Federal Reserve's firm commitment to monetary tightening in order to bring inflation closer to the 2 % mark.
Amid clear signs that affordability is curbing demand, some homeowners may fear that they missed the market's peak, with real estate markets still contending with significant under building, compounded by construction companies slashing single-family starts, the transition toward balance is losing steam.
Expectations are that he will highlight the central bank's commitment to continued monetary tightening for the remainder of the year, the Fed's continued rate hikes, combined with balance sheet reduction through mortgage-backed securities rolloffs are expected to keep upward pressure on mortgage rates.
Markets are seeking more certainty around the economic outlook, as incoming data continue to highlight a steady level of business activity and consumer spending.
These shifts point toward a welcome change for buyers who are still in the market, the upcoming fall season may offer an even better window of opportunity, as long as the inventory landscape continues improving, as we've seen in recent months.
The inventory of homes for sale increased solidly in July, moving toward levels not seen since mid-2020, with more available properties and less competition, more homeowners are beginning to adjust to the new reality and resorting to price cuts to incentivize buyers.
Without a clear direction, markets are confining mortgage rates to move within a tighter range, as the sharp upward push has moderated.
The big question for consumers is whether companies will over-react to the recession concerns and start trimming payrolls, a sharp pullback in hiring could have a direct impact on people's ability to keep spending, especially with today's high inflation.
The statement was welcomed by financial markets as a sign that The Federal Reserve expects inflation to slow more noticeably, requiring a less aggressive response.
For those motivated to sell, price reductions are becoming a go-to strategy, we can expect the re-balancing in housing markets to continue and to pick up speed, especially as we look toward the fall and winter seasons.
This yield-curve inversion points toward growing investor concern that the Federal Reserve's rate setting is not likely to tamp down fast-running inflation.
People who can not afford to buy a home are not finding much reprieve in the rental market, looking to the next few months, it's becoming increasingly clear that real estate markets are headed for a correction.
The Federal Reserve has been walking a tightrope of gradually increasing borrowing costs while trying to avoid a knee-jerk reaction from consumers and businesses, however, with inflation soaring, the runway for a soft landing is shrinking considerably, as are the chances of avoiding a recession.
Investors have their eyes on the Consumer Price Index, expecting to see continued gains but at a moderating pace.
The economic outlook is highly dependent on the well-being of the American consumer, for many Americans looking for affordable pockets of housing, mid-sized cities remain a viable alternative, especially as the number of homes for sale has been on the rise, bringing fresh options.
The Treasury yield backed off as investors worried about China's worsening Covid outbreak and large-scale lockdowns.
Markets reached peak prices early this spring, with the next few months expected to see a moderation in the pace of appreciation followed by a flattening in the fall, the good news is that for buyers frustrated by the past year's frenzied market, the shift toward a more normal landscape holds the promise of more homes to choose from, a slower pace of sales, and better prices.
Today's SP Case-Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates.
Higher rents are encouraging many tenants to take a second look at buying a home, especially in cities where a mortgage payment may be on par or lower than monthly rent, on the other hand, the for-sale market continues to be undersupplied, making it difficult to find an affordable home.
For buyers and sellers, this spring will offer a period of transition, in which high prices will combine with rising interest rates to challenge budgets already contending with high inflation.
The main takeaway is that mortgage rates are likely to push toward 5.0 % before the end of the year, with lenders anecdotally reporting quotes around 4.75 % for the 30-year fixed rate.
Inflation is unlikely to slow down any time soon.
With not enough homes for sale, both first-time buyers and homeowners looking for a trade-up home are locked in place by surging prices and higher interest rates, the real challenge for Americans is that the high inflation is eating away at the growth in wages and salaries, on top of spiking housing and living costs.
The mild impact of the Omicron wave, despite the high number of cases, points toward a brighter post-pandemic horizon, a sentiment which underpins a more bullish outlook on the economy.
With prices for most consumer goods and services increasing, buyers are feeling the pinch on their wallets, affordability continues to be a central challenge for this year's first-time buyers.
For buyers still reeling from last year's overheated market and sky-high prices, fast-paced inflation is squeezing their budgets, and offsetting low mortgage rates.
The variant appears to be milder, and economic data is showing strong resilience, i expect the upward momentum in Treasury rates to continue to drive mortgage rates higher.
Despite a challenging year, aspiring first-time homebuyers are surprisingly optimistic about 2022.
As we approach the end of a tumultuous 2021, real estate markets continue to struggle with inventory, homes are selling quickly and prices continue to rise.
Today's SP Case-Shiller Index spotlights an early fall housing market with fewer families actively looking for homes after the start of a new, and mostly in-person, school year.
Halfway through October, the number of homes for sale has improved compared to the overheated first half of this year, leading to slower price growth, it seems that buyers and sellers are finally taking a step back from the pandemic-induced stampede of the past year to regain their footing and reassess their next steps.
Today’s SP Case Shiller Index spotlights a hot summer’s housing market, where buyers prepared with cash for down payments and low interest rate loans placed competing bids for an evaporating supply of homes available for sale and drove prices higher.
Rising prices during summer months reflected a combination of peak demand and larger homes for sale, as families with school-age children competed to secure a place for the new school year, in a noticeable shift, July saw real estate markets welcome a larger influx of new listings, as homeowners across the country decided to move on with pandemic-delayed plans to sell.
The highly competitive real estate market we saw in the first six months of 2021 squeezed available inventory to record-lows and pushed prices to new highs just as summer emerged, leaving many first-time buyers feeling frustrated.
Real estate markets continue to see asking prices near record highs, as the favorable financing environment has motivated buyers to keep searching for homes, even amid tight inventory.
Mortgage rates this low, coupled with current demographics favoring homeownership, would normally lead to strong sales activity, however, getting approved for a loan is proving to be a difficult challenge for many, especially first-time homebuyers who struggle to come up with a 20 % down payment.
Today's report shows mortgage rates declined as investors reacted to the surge in Covid cases and the Federal Reserve's concerned outlook for economic recovery.
On one hand, buyers are clearly returning to the market, eager to take advantage of low interest rates while moving toward a new normal, on the other hand, the strong resurgence in Covid cases, especially in Sun Belt states, along with broader economic uncertainty during the current recession, is holding many sellers back from entering the market.
Quote of the Day Today's Quote | Archive
Would you like us to send you a FREE inspiring quote delivered to your inbox daily?
Use the citation below to add this author page to your bibliography:
"George Ratiu Quotes." Quotes.net. STANDS4 LLC, 2023. Web. 26 Mar. 2023. <https://www.quotes.net/authors/George+Ratiu+Quotes>.
Share your thoughts on George Ratiu's quotes with the community:
We're doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we'll take care of it shortly.
You need to be logged in to favorite.