Welcome to another 5th week edition of the newsletter, 5th week editions are our referral specials.  Share this newsletter with friends or family for a chance to win a $50 gift card. 

Let me begin by saying this is NOT a political post.  However, it must be said, it seems the financial markets are placing their bets on the presidential election in six days (thank God, let's get this over with already).  The 10yr yield has rocketed higher to 4.30%.  The once anticipated 100bps of further cuts to the Fed funds rate before the end of the year has turned into maybe 50bps, or possibly even none.  This is a combination of multiple things.  Economic data, employment and the American consumer have proved resilient.  On top of that, prediction markets, polls and bond traders are placing their money on a Trump victory.  What does this mean?  Well, Trump is running on the back of eliminating an income tax and introducing tariffs.  Tariffs increase the costs of goods coming into the country.  The goal is to bring back American jobs, boost growth and earnings of the worker.  Now, this is where bond traders and the 10yr yield come into play, the downside of this proposed economic policy...inflation.  Tariffs increase the cost of goods coming into the country, which is inflationary to the price.  It's unclear how certain items will be affected, but the point being in that environment inflation may come into play again and cutting rates may become a distant memory.  Hence, the 10yr yield is back to 4.3% and 30yr mortgage rates are flirting with 7% again (sigh).

Aren't you glad I write this newsletter every week?  When I conceived this newsletter I went back and forth on a monthly vs. weekly post.  Now, I couldn't imagine writing this once a month. 

So, how does this change the real estate market? Well, purchase applications have revolted.  The possibility of higher for longer interest rates is lingering again, and home prices aren't budging in any dramatic way due to lack of supply.  As usual, my advice is simply to be PREPARED.  Everything the market is predicting and the policies candidates are championing does not mean that they will come to fruition or be implemented.  Be ready to pounce.



What are you seeing or hearing? I'd love to know paul@guiderealestate.com
Visit www.paulpelettarealtor.com

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What are you seeing or hearing? I'd love to know paul@guiderealestate.com