I hope you’re staying cozy as we head deeper into the fall! This week has been all about signals—signals from the Federal Reserve, signals from the housing market, and even a signal about the very best time to buy a home.
The Fed Speaks Out (Before the Quiet)
This past week brought a flurry of comments from Federal Reserve officials before they enter their “blackout period” ahead of their October 28–29 meeting. The general message is one of careful optimism and caution, reflecting a central bank walking a tightrope:
• Job Worries are Growing: Fed Chair Jerome Powell and other governors highlighted a clear slowdown in U.S. hiring. Policymakers like Governor Christopher Waller and Vice Chair Michelle Bowman are increasingly concerned about labor market deterioration, arguing that if job weakness continues while inflation is stable, the Fed should make “decisive interest rate cuts.” • Inflation Still “Sticky”: On the other side, officials noted that inflation remains an issue, with the latest readings still above the Fed’s 2 percent target. They are careful not to ease too quickly and accidentally reignite price spikes. • The Big Picture: The overall consensus is a data-driven path. They are ready to adjust—cutting rates if the job market falters significantly, or maintaining them if inflation shows signs of re-acceleration.
What is certain is that the market likes the talk of rate cuts. Combined with the recent good news of an Israel-Hamas ceasefire helping oil prices drop below $60 per barrel (lower oil generally means lower long-term rates like mortgages!), the path for rates is looking more favorable.
Mortgage Rates Hit a Favorable Level
The most immediate good news for all of you is that mortgage rates have responded positively to the economic signals!
• In Freddie Mac’s weekly survey, the results showed the average 30-year fixed rate has inched down by .03 percent from last week. • Freddie Mac’s Chief Economist noted that these consistently lower rates are boosting both home purchase and refinance activity. It seems homeowners are seizing the opportunity! • And since that report, we ended last week with rates at the lowest levels in just over a month, showing the 3rd best day in over a year and the 24th best day in over 3 years!
We are currently enjoying rates near the best levels of the year, and importantly, there is very minimal daily volatility. The calm in the market means more predictable pricing for borrowers, which is always a good thing when you’re preparing for a lock.
Housing Market: Buyers and Builders React
We’re seeing interesting movement in the housing market as both buyers and builders react to current conditions:
• New Home Sales: Despite a slight month-over-month decrease in September (which is typical for seasonal patterns), new home purchase applications were up 2 percent year-over-year. This suggests that builders offering incentives and more inventory are still seeing demand, particularly as the average new home loan size ticked up to $379,107. • Builder Confidence is Up: The latest survey showed that builder confidence posted a solid gain, the highest reading since April! Builders are anticipating an improving sales environment next year, and in the meantime, 38 percent of them are cutting prices (by an average of 6 percent) to move inventory. This tells me that sellers, especially builders, are ready to negotiate.
Your Secret Weapon: Timing the Market
For my first-time buyers and anyone not burdened by selling an existing home, I have a powerful piece of information for you: January is historically the best month to buy a home.
According to a new study, buying a home in January could save you around $23,000 on a typical home compared to buying in the peak month of May. Why?
1. Less Competition: January is the slowest month for sales. 2. Motivated Sellers: Homes linger on the market for a median of 75 days in January, compared to just 48 days in the spring. Sellers who are on the market over the holidays are often ready to lower prices and strike a deal!
If you have the luxury of time, preparing your financing now and aiming for a January closing could be a brilliant move to maximize your savings.
Looking Ahead: The major event this week is the long-delayed September Consumer Price Index (CPI) report, scheduled for Friday, October 24. This is a critical inflation report, and depending on the details, it could certainly get rates moving—for better or for worse. I’ll be watching it closely for you!
As always, I’m here to translate this market noise into a clear strategy for your personal goals. Let’s connect soon! Feel free to send me an email, or you can call/text me at 818.307.6072.
