So much to be thankful for this Thanksgiving, including a third straight week of improving mortgage rates, making right now an incredible opportunity to pop back into the housing market if you’ve been waiting on the sidelines. Rates have improved, but we haven’t yet seen a rush of home buyers increasing competition and prices as of yet, but we know it’s coming.
Why the turn of direction in rates? Primarily because the evidence of inflation declining and another Fed rate hike becoming less and less likely. Remember that the Fed’s job is to keep inflation in check and promote maximum employment.
As we see inflation continue to decelerate and unemployment start to rise, it makes it much less likely that the Fed will increase its interest rate, which sets the stage for other interest rates – like those of mortgages – to improve. And, if the trends continue for inflation and employment, the Fed will eventually look to a rate cut.
The interesting unknown in this equation is the Treasury auctions. As the US government continues to sell Treasuries to raise money to fund the government, there has to be buyers for all that debt. The question remains, will the Treasury need to offer higher interest rates to continue to entice bond buyers? We’ll have to wait and see.
As for this week…
Of course, this is a holiday-shortened week, with the Thanksgiving holiday coming up on Thursday and half the day on Friday. Ahead of that, we have only a couple important economic reports. This is usually a pretty quiet, sideways-moving week in the markets unless, of course, there are any economic or geo-political surprises.
As for data, we saw the release of the latest Existing Home Sales numbers. After September’s 3.96 million annual rate, existing home sales in October slowed 4.1 percent from last month to 3.79 million. Low inventory of homes for sale, high prices, and high-interest rates have been hurting sales. The decline was seen in 3 of the 4 major U.S. regions – Northeast, South, and West. Sales in the Midwest remained unchanged.
The only other report of note is Durable Goods Orders, a leading indicator of overall economic activity. Forecasters see durable goods orders falling back 3.2 percent in October following September’s 4.6 percent jump that was led by commercial aircraft but otherwise showed broad strength.
As we pause to celebrate Thanksgiving, I want you to know how thankful I am for you and that I get the honor of serving you and your friends and family on the home-buying journey. I wish you and yours a joyful and blessed Thanksgiving!
