After July's momentary celebration of 5% interest rates, August ended the month at six, then September just finished having crossed 7%. Only a few months ago, six and a quarter seemed like the absolute ceiling as the US continued its strong stance against the slowing global economy, but that didn't last. We saw European economies bear the brunt of Russia's war on Ukraine. Japan struggling with lower global demand for its manufactured goods and China's economic troubles thanks to its zero Covid policy. All of these strengthen the dollar while creating credible volatility for our mortgage bonds. The fight here in the United States is the fight against inflation. For the last few years, we've seen too many dollars chasing too few goods, pushing the price of those goods up as demand spiked.
The Federal Reserve's job now is to constrain the dollar spent. Think about this. 28% of all goods purchased are done with a credit card that doesn't even include car loans, home loans, or business loans. Buying on credit creates money, future money pulled forward, giving you access to a product or service today for payment in the future. For the Fed to control spending, they have to make the cost of borrowing higher, so it creates more pain. At the same time, the benefit of savings has also gone up as the Fed raised its Fed rate or overnight rate. So goes the one-year treasury. The safest of all investments is backed by the federal government. This rate is 4.01% today, which is significantly higher than the long-term average of 2.85% and will increase further after November 2nd.
Listen to the rest of this summary.
Using ADU Rent to Qualify for More home
Transferring Wealth Through Real Estate
Purchasing a Home in High Inflationary Times
DMAR June 2022 - Is the housing frenzy over?
A Window of Opportunity for in Today’s Market
Interest Rates Dropped Going Into Memorial Weekend
Agents and Homebuyers - The Benefits of Choosing Your Own Mortgage Team
4 Reasons Higher Interest Rates Benefit Buyers
Should You Get an Adjustable Rate Mortgage?
Tips and Strategies to Get Under Contract.
Four Reasons a Recession Will Benefit You
What does it mean if the housing market is slowing?
Know Your Definition of Success
Appreciation is dropping, will home values follow?
Interest Rates are Increasing, is a Recession Looming?
Holding Out for the Must-Haves in Your Next Home
Reverse Mortgages Used as a Smart Financial Strategy - not the loan of last resort from the past
What is the difference between FHA and conventional loans?
6 Reasons Why Home Prices are Increasing
What Happens After You Leave the Closing Table?
Create your
podcast in
minutes
It is Free
The Commercial Edge: Unleash the Power of People
The emPOWERed Half Hour
Aligned Money Show
Dubai Property Podcast
IBKR Podcasts
The Ramsey Show
The Clark Howard Podcast