Market Update -July 31st, 2023
Good morning! The final week of July ended with a bang 💥! A favorable Fed meeting on Wednesday followed by super strong economic indicators on Thursday left the week with rates slightly higher. We’ll break it all down below.
Additionally, we’ve included a new realtor value-bomb this week that will help you in the field when the client starts asking you mortgage-related questions. Check it out!
We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers. Be sure to follow us!
Fed Meets Again - Increased Rates by 0.25%
Jerome Powell, as expected, increased the Federal Funds Rate by 0.25% on Wednesday. The press conference, after the announcement, was interesting but didn’t indicate any meaningful guidance on future rate hikes. The markets reacted favorably on the day and mortgage rates pulled back by the time the markets closed.
Key Takeaway: The raise in the funds rate was almost a non-event, all things considered. It was already baked into the market. The fact Jerome Powell wasn’t super hawkish during the meeting helped give investors confidence that hikes may have been done. But then Thursday happened…
Stronger Economic Data Thursday Wipes Gains
On Thursday we saw a flurry of new, strong economic data points that suggested the economy is still chugging along at breakneck speed. Here is the run-down:
Initial Jobless Claims – Came in at 221,000 vs. expectations around 235,000. This tells us that fewer folks are needing unemployment and finding jobs easily.
Durable Goods Orders – Came in at +4.7% for June vs. expectations at +1.5%. Durable goods are items that are expected to last more than 3 years. Retailers may be preparing for consumers to have more disposable income for longer.
GDP (Gross Domestic Product) – Came in at +2.4% for Q2 vs. expectations at +2.0%. GDP measures the monetary value of all goods and services produced in a country. This shows that the US was able to grow in Q2 at a pace stronger than expected.
Pending Home Sales – Came in at +0.3% for June vs. expectations at -0.5%. June sales came in higher than May, which traditionally makes sense with the summer selling season in full swing by June. However, many experts predicted a slowing down of pending sales. That was not the case
Key Takeaway: Thursday’s economic indicators were so strong, the market immediately set new expectations that the Fed will continue to enforce strict monetary policy leading to higher interest rates for longer.
Realtor Value Bomb – Top 10 Mortgage Questions Asked by Buyers
Kreg and I are sure you get asked mortgage related questions all the time. We always recommend forwarding those to us, but if you are ever in a bind and need some quick answers, we pulled together a quick guide to help you answer the top 10 most-asked mortgage related questions from homebuyers. Use this wisely and you’ll look like the go-to real estate expert in your client’s eyes 😎
Instagram Posts from Last Week
Don’t hesitate to reach out if you need anything at all. Have a wonderful week!