R.A.T.E.S.: Your Weekly Dose of Market Wisdom
Welcome to R.A.T.E.S. - your go-to guide for Real Estate And Trends in Economic Sectors. Let's break down this week's mortgage market moves to make you the star of your next client conversation!
TL;DR: Too Long; Didn't Read
Your client conversation cheat sheet:
Mortgage rates fluctuated but could decrease due to Treasury's focus on short-term bonds
Job market showing signs of cooling: openings down 15%, but unemployment stable at 4%
Home prices rose 0.2% in December; 2024 forecast increased to 4.1% appreciation
Key watch: CPI report on Wednesday could create short-term rate opportunities
Mortgage Rates and Treasury Decisions
Mortgage rates fluctuated last week due to mixed economic signals, in a good way. The Treasury's focus on short-term bond issuance could lower mortgage rates in the coming months. Rates initially decreased this week due to uncertainty around potential tariffs and labor market changes, then increased slightly after yesterday’s BLS Jobs Report.
Pro Tip for Agents: Explain to clients that while rates change weekly, the long-term trend points toward stabilization. Missing out on current home prices while waiting for lower rates could be costly. Check out my Cost of Waiting Blog
Labor Market Data and Housing Impact
Recent employment numbers show several key changes:
Job openings decreased 15% from last year
Hourly earnings increased 0.5%, while total hours worked decreased
Unemployment reached 4%, partly due to census adjustments adding 2 million people to the labor force
Housing Market Effects:
Job stability continues supporting qualified buyers
Slower wage growth helps reduce inflation, benefiting mortgage rates
Economic indicators support sustained home values
Home Price Trends
CoreLogic and ICE data confirm home values increased 0.2% in December, with 3.4% annual appreciation. Forecasts for 2024 now project 4.1% appreciation, up from previous estimates of 3.8%.
Market Context: Current data indicates continued price increases. Buyers who wait will likely pay more for similar properties.
Timing the Market: Buy Now or Wait?
Key factors for client discussions:
Rates are stabilizing but remain volatile short-term
Home prices continue rising with strong demand
Lower rates typically bring increased buyer competition
This Upcoming Week's Focus: CPI Impact
Wednesday's Consumer Price Index (CPI) report could affect mortgage rates. Lower inflation numbers might create temporary rate decreases.
Action Items:
Keep pre-approved buyers informed of rate changes
Maintain contact with active sellers
Watch for mid-week rate movementsmed decisions based on current market conditions.