Hold On For One More Day
This week’s “pop” hit is Wilson Phillips’s 1990 “Hold On.” The song starts with “I know there’s pain…” which cannot be truer when watching what mortgage rates have done over the past 30 days. Mortgage rates have soared to their highest levels since early July on some interesting interpretations of economic data and “betting” by our “Wall Street Warriors” on the election results. The more interesting part is that things have not changed over the past 30 days when rates were heading towards the 6% mark. It appears that inflation continues to head towards lower levels, and while we did get a somewhat surprising employment number last month, it was not a barn burner that the economy has turned around. We have still seen the unemployment rate rise from 3.4% to over 4% in a 12-month time frame. Car sales for the past year are down 12%, which includes a drop of 17.7% for passenger cars. Housing sales are at their lowest levels since 1995. Housing prices are beginning to fall. Sellers are beginning to pay towards closing costs for new buyers, which is a sign that we are entering back into a “buyers” market, and we have not seen this for years. None of these things are signs of a “robust” economy, and rising rates will not help the situation either.
Our “Warriors of Wall Street” continue to be betting on a “RED” sweep next Tuesday, which is interesting… interesting in that it could happen… and if it did, I am not sure how this will reverse all that we are currently experiencing and how pushing rates higher helps the economy to grow? I somewhat get the “macroeconomics” to this theory, but this would assume a dramatic turn in the economy, which I don’t believe can be accomplished in a short period of time. The US economy is still reeling from what the Fed has done to rates over the past several years, and the unwinding of their unprecedented hikes will take some time. I don’t think we will get back to under 1% on FED funds, but another 1% to 1.5% in rate cuts by the FED may get us back on our feet, and we just might hit the “soft landing” that no Federal Reserve has ever achieved in the past. We need to “hold on for one more day,” and maybe by next week’s report, we will begin to see mortgage rates begin to move back down again.
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
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Blog post date: Wednesday, October 30, 2024
