The beginning of August started with a bang, aye? The FOMC was last Wednesday and everything seemed calm and cool...and then Thursday and Friday job reports came out. Friday's report showed a surprise to the downside. The number of jobs added in the last month was a big miss. This further brings into the light a cooling job market. This was the beginning of the fear that the Fed is, once again, waiting to long to make a move. The stock market crashed as a result. I personally believe it's a big overreaction. The job market is simply showing signs of cooling. GDP economic growth earlier in the month was 2%+. If you remember, the Fed has a dual mandate, to keep inflation at bay AND to keep employment in balance. We are here now, and we will see how the Fed tightropes the next few weeks. It is widely expected for them to lower the Fed's interest rates in September. What does this mean for housing? Exactly what we've been looking for this whole year of 2024. We have been waiting for the jobs market to soften. The 10yr yield has responded accordingly and with it 30yr mortgage rates are comfortably below 7%. If you notice below, a standard 30yr mortgage can be had at 6.625% without points paid. You love to see it. Now, how does that affect the market moving forward? Well, we are still in a seasonally slow period as vacations wind down and school begins. There isn't a lot of motivation to move around these times. We'll need to watch purchase applications over the next few weeks to see how potential buyers respond. I would not be surprised to see a steady increase in purchase applications with demand slowing picking up every week. The key will be mortgage rates holding steady here while we wait for the next Fed meeting in September. Buyers want to see steady rates before diving back into the market. If we can see some steadiness, sidelined buyers will trickle back in, competition should descend on the higher inventory and home prices could start to work their way back up. Let's see! Have you heard anyone talk about moving to Texas recently? The main picture above (5 acre country estate), and this week's listing highlight is my client's home for sale in Burleson, TX. Check out the pictures and the listing on Zillow. If you've heard whispers, please let me know! What are you seeing or hearing? I'd love to know paul@guiderealestate.comVisit www.paulpelettarealtor.com |
