Riding the Storm Out
This week’s “Rock” pick, as it relates to current-day economics, is “Riding the Storm Out” by REO Speedwagon from 1981. It seems that the American public is willing to wait for rates to come back down before they make a new home purchase, as well as other consumer goods and services. They appear to be “Riding the Storm Out” until the FED decides to move rates lower and bring affordability more in line with what people can afford: including homes, foods, and other consumer goods and services.
We saw retail sales come in this week for the month of May only up .1%, and April’s figures were revised to down .2%. Consumer sentiment also fell in May, falling to 62.5% from 69.1% in April, a far cry from the 101 peak we saw pre-pandemic.
According to Redfin, 61.9% of homes listed (nationwide) in May were on the market for over 30 days, and over 40% of the homes still for sale in May had been on the market for two months.
The “good news” is that the Metro ATL market is doing better than the national averages, but not by much. The average home in the Metro ATL averages 37 days on the market with roughly two offers during that time frame. Home prices have risen 6.6% since this time last year, which is still not a bad return on your money.
The FED needs to adjust their thinking, or they will drive us into recession quickly. Focusing on just the “inflation” rate will be a recipe for disaster as they need to focus on employment numbers, retail sales, business closures, and overall consumer sentiment. It would be great if they could achieve their 2% inflation goal but not at the expense of people’s jobs and their inability to purchase goods and services. But if you don’t have a job and can’t afford a place to live, how wonderful is a 2% inflation rate? Perhaps taking a macroeconomic approach as opposed to a micro one could keep us out of recession. While the “market” is only predicting one rate cut this year, I am calling for two and one, maybe as soon as late summer and possibly another one before the election, as “data” will show we are moving quickly into recession.
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: Thursday, June 20, 2024
