Market Update - January 22nd, 2024
Hello all! We have finally made it to Rise & Thrive week! We are extremely grateful for those that have secured tickets as we are officially sold out 🙌 We have put a lot of time and effort into making this event memorable for all those that attend. Get pumped 💪
Don’t forget Rise & Thrive 2024 is coming up on Tuesday January 23rd.
We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!
Read time: ~5 minutes
Mortgage Rates Reach Highest Level in Over a Month
One of my pet peeves is how the media reports on mortgage interest rates, often being more than two weeks behind the actual market trends. I read several media reports this week incorrectly stating that rates dropped to their lowest levels since May. Unfortunately, this information couldn’t be further from the truth for the current week. More of a reason to ensure you read our weekly newsletter for the most accurate and up-to-date information regarding the market 😊.
In reality, rates took a turn for the worse last week as a number of economic reports came back better than expected. Remember, when it comes to interest rates, good economic news is typically bad for mortgage rates and vice versa.
The biggest market mover last week was from December Retail Sales. The Retail Sales report came back strong which indicates that people spent more money in December, even after considering holiday expenses and inflation.
This is bad news for fans of lower interest rates as increased spending can lead to higher inflation. Since inflation is the main reason interest rates are high, this resulted in a negative response in the interest rate market.
Key Takeaway : Don’t rely on media reports for the most up-to-date information regarding mortgage rates. The media tends to lag behind the current market trends by more than two weeks. Rates increased around 0.25% this week due to better-than-expected economic reports. Stronger economic reports = higher interest rates.
Fed Speaker Pumps Brakes on Rates Cuts
Last week, Fed Governor Christopher Waller, expressed growing confidence that the Fed is within striking distance of achieving a sustainable level of 2% inflation. However, he stated that he needs to see more data confirming that inflation is continuing to move down before cutting rates.
He said he thinks the Fed will cut three times this year, in line with the Fed’s December meeting projections. However, he did note that the economy appeared to be in good shape, and he sees no reason to move as quickly or cut as rapidly as in the past. The interest rate market did not like this comment as it was pricing in a 61% chance of a rate cut at the March 20th meeting.
It seems that the interest rate market is starting to listen to the warning signs that March may be too early to consider a rate cut. If the probability of a March rate cut continues to slip away, mortgage rates will continue to creep higher.
Key Takeaway : We need a shift in sentiment that the Fed will cut rates in March before we see any significant improvement in rates. The recent strong economic data is more of a reason for the Fed to keep rates higher for longer and hold off on a rate cut in March.
Rise & Thrive is Tomorrow
Ya’ll really did it! You’ve acknowledged that central Ohio needs better training opportunities for local real estate agents and housing industry professionals. In less than 2 weeks, Rise & Thrive 2024 sold beyond the initial allotment of 100 seats. We squeezed in 20 more seats which were promptly scooped up.
We can’t wait to see everybody Tuesday from 1-5PM at Lower.com Field in downtown Columbus!