Strap in, this is a long one!
Last week the CPI came out not as expected. The percentage doesn't matter as much as the DIRECTION... it went up! This threw the market for a loop. Interest rates did increase and now the headlines are making you believe we are going into depression.
WE ARE STILL IN A STRONG HOUSING MARKET.
The likelihood of massive job loss and massive loss in the stock market is not likely... granted it may feel like it today.
Interest rates increased from 5.5% last Thursday to 6.18% yesterday. As we go into FED week, the market was expecting a 50bp increase. However, with the increase in CPI, the FED may be forced to increase that rate even more. That possibility of change is what makes the market react. The market likes knowing what is going to happen. So when the possibility of change looms, it begins to move.
Bottom line is that rates went up for several reasons, but we remain part of an incredibly strong real estate market.
I want to talk about the interest rates first because they went from 5.5 on Thursday to 6.18% on Monday 5.5% . That is a massive jump. Especially if you are watching my live session. I said, hurry up and get under contract, take advantage of the interest rates that we have today because next week we're going into the fed.
Now, even when interest rates started to go up, a lot of people are asking me how high do you think, they could go? And I was like six and a quarter, right? So we're here. We're at 6.25%. We made it, do we go much higher? I don't know. I don't know because the fed where we're at right now is a little bit unchartered. We've got this quantitative tightening that's happening and how aggressive the fed, uh, goes, is going to push interest rates. But what interest rates are doing right now is squelching demand. It's authentic demand reduction.
Listen to this episode as I also cover the continuing reasons the housing market is so strong. GET IN NOW!
The Resiliency of Real Estate - It's not back to business as usual yet.
5 Tips for staying sharp, relevant, helpful.
Agents, are you taking this time to binge or build?
You cannot feel both gratitude and entitlement at the same time
Landlord Issues with Forbearance and Where Did All the Jumbos Go?
Preparing Agents to be Able to Respond to the Rebound
Help us keep new moms connected with their nurses through Nurse-Family Partnership
HomeAid Colorado - Building Solutions for Their Communities
FHFA is Gonna "Wait and See" if Servicers Need Liquidity.
What new home buyers need to do now so they can buy, rather than rent, plus Freddie & Fannie updates
How the Stimulus Package Affects Real Estate, and Equity Rich Zip-codes
Housing Was, Is and Will be Strong -DMAR April 2020
Helping SECORCares in April - Feeding, supporting, training for our neighbors to help them succeed.
FHA is NOT Dead; Forbearance is NOT Forgiveness
Coffee Talk - Recapping the Week in Real Estate 03212020
Your Questions Answered Forbearance, Rates, Fannie and Freddie
Pausing - State Trumps County and the Damien Cox Letter
3 Options to Increase Liquidity NOW
Homeownership - Getting Creative in This Time of Disruption.
How to switch from transactional solutions to individualized solutions.
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