Why is the 10yr yield and 30yr mortgage rate coming down without the Fed cutting rates yet?  The financial markets are discount mechanisms, and forward looking.  The 10yr yield, which we in this newsletter use to closely keep tabs on our beloved 30yr mortgage rates has been sliding down since June.  Why?  Well, because it became clear that inflation is being contained (CPI last month posted under 3%) and the last chip needing to fall to force the Fed's hand would be employment.  June just so happened to be the first time unemployment ticked back over 4% since 2021.  In July, unemployment hit 4.3%, and as of last Friday it held steady at 4.2%.  The financial markets sensed employment weakness back in June and began discounting the 10yr bond yields in anticipation of eventual rate cuts.  Remember, the Fed has a dual mandate, price stability AND employment.  So, with inflation relatively back under control, it is widely anticipated that the Fed will cut the Fed Funds rate this September at the next FOMC meeting.  Last week the monthly data for jobs and employment came out.  The numbers weren't terrible, but there is now multiple months of evidence showing weakness in national employment.  The Fed was slow to increase rates to curb inflation, and DOES NOT want to be slow in cutting rates, risking a job loss recession.
This newsletter has been on top of the 10yr yield and 30yr mortgage rate moves.  We've been watching it drop together.  Last week I recommended to anyone thinking about buying or selling a home in the next 3, 6. 9, 12 months to at least get the ball rolling.  Why?  I am forward looking.  I am proactive.  When it comes to real estate, I want to ensure my readers have this information available to them.  Yes, rates have come down.  They may come down further.  When they do, buyer demand will come out in full force.  Anyone not prepared will lose out to the increased competition.  To be clear, it is only if someone is already thinking about it.  It never hurts to get the numbers in order anyway, but the best time to buy or sell real estate is A. when we want to, it makes sense for the situation and B. the numbers make sense and we are comfortable with the costs.

You can see my preferred lender's current rates below, 30yr mortgage at 6.125%.  We are now almost 2% lower from the highs.  And, as of last week, purchase applications have only risen 0.92%.  I imagine this number changes to the upside later today and next week.

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

Welcome to this spacious north-east facing 4-bedroom, 3-bathroom home located at 9416 Lyndley Plaza Way in Elk Grove. With a generous 3389 square feet of living space and a total lot size of 6906 square feet, this property offers ample room for comfortable living. The interior boasts a well-designed layout with plenty of natural light, creating a warm and inviting atmosphere. The primary bedroom provides a relaxing retreat, complete with an en-suite bathroom, large walk in closet and a dual sided fireplace. There's also a large loft are and a huge bonus room upstairs that's awaiting your imagination. One of the standout features of this home is the RV access, perfect for those who enjoy outdoor adventures or need space for additional vehicles. The outdoor space also includes a sizable yard, providing a great opportunity for gardening, entertaining, or simply enjoying the California sunshine. Conveniently located in Elk Grove, this home offers easy access to a variety of amenities and attractions, making it an ideal place to call home. Don't miss out on the opportunity to make this spacious and well-appointed property your own.

  Listed at $860,000 by Kelly Paulsen - Compass
9416 Lyndley Plaza Way, Elk Grove, CA 95624

Know someone who may be interested? Let me know at paul@guiderealestate.com

*These rates are courtesy of Dara Delgado - Home Loans*