As we head into this short, holiday-packed week, I wanted to send a quick note. The bond market might be a little “weird” this week due to lighter holiday participation, which could mean some volatility, but nothing dramatic to report yet.
I hope this update finds you well and helps keep you informed about the forces shaping our housing market.
What’s Going On with Interest Rates?
Good news first: The 30-year fixed-rate mortgage has been holding steady within a narrow range. This rate stability is a positive sign for the housing market, offering more certainty for buyers and sellers, and it’s notably lower than the rates we saw a year ago, by .58 percent!
The Fed’s Cautious Approach
The Federal Reserve is in no hurry to cut rates. Minutes from their latest meeting show they are not convinced inflation is cooling fast enough.
• Mixed Signals: A stronger-than-expected September Jobs Report actually complicates the Fed’s path, as strong hiring suggests the economy hasn’t cooled enough.
• The Bottom Line: The Fed’s “higher for longer” stance remains in play. Another rate cut in the short term is not guaranteed, meaning we should anticipate current rate ranges holding for a while.
A Peek at the Housing Market
Despite the interest rate backdrop, we are seeing some encouraging trends:
• Existing Home Sales are Up: October sales rose to the fastest pace since February. This modest rebound, fueled by rates easing in the late summer, signals tentative demand returning to the market.
• Younger Buyers Emerge: Research shows that while affordability delayed homeownership for Millennials and Gen Zers, they are now catching up quickly. Millennials are rapidly buying homes in their 30s, and Gen Zers are entering the market with surprising strength. The dream of homeownership wasn’t dashed; it was just delayed.
• Future Supply: As older generations gradually provide more inventory, this will create a welcome “tailwind of supply” for these younger buyers.
What to Watch This Week
Keep an eye on Black Friday Sales Data—massive consumer spending could impact the Fed’s inflation outlook. Also, watch the 10-Year Treasury Yield; a convincing move below 4.0 percent would signal significantly lower mortgage rates ahead.
A Note of Gratitude
As we approach Thanksgiving, I want to express to you how grateful I am every day for you and that I am part of your world. Thank you! I am truly grateful for your trust. I hope you have a wonderful, relaxing Thanksgiving holiday!
