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.
Earnest Money Guarantee is Your Secret Weapon Against All Cash Offers
DMAR May 2021 Taper Tantrums and Equity Cushions
How to Build Your Top 25 Brand Advocates
The First 90 Minutes of Your Four Hour Workday - Mind, Body, Heart and 30 for the Spirit
Strained Denver Housing Inventory, Understanding Headlines, and Cryptocurrency
Fact vs. Fiction - Housing Bubble - Colorado
Fact vs. Fiction - Home Loans
Fact vs. Fiction: Interest Rates and Long-term Investments
What is the purpose of a title company in a real estate transaction?
Questions to Ask Your Homeowner's Insurance Agent
Tight Inventory Is Behind Denver Real Estate Market Agony
What Consumers Need to Know About Appraisals
How to Raise Your Credit Score
Exploring 80113, 801212, 80103, 80119, 80222 Neighborhoods
Top 4 Things to Know Before an Inspection, How to Exit Forbearance
Today’s Real Estate Market – I know. I wonder. I’m boggled.
Ivy Zelman's Insights at the Fairway Economic and Housing Summit
December 2020 Real Estate Tips Round Up
Finding Your Niche Will Serve You and Your Clients Well
Let your home help you make money in your sleep.
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