Monthly Market Metrics | 11.2023
Thank you for tuning in to Tungol Mandap’s Monthly Report on rates and economic activity affecting your real estate market today. The Monthly Market Metrics is a new series that will explore the things happening around us that affect the economics of buying a home. Often, people miss opportunities in the real estate market because they are looking at the wrong aspect or they don’t see how valuable a compromise can be. Hopefully, this report will help you make some informed decisions about home-buying at the right time. Our contributing lending expert, Mark Thatcher of Fairway Independent Mortgage Corp., will break things down in ways that are easy to understand and hard to forget, so you will have a toolkit of knowledge to interpret things you hear about the real estate market.
The past few months, before I began writing this report, I thought, “How do I express my own optimism in the housing market, genuinely, in the midst of interest rates steadily creeping higher?” In my profession, there is nothing worse than providing a quote to someone trying to buy a house and once they are under contract and ready to lock the rate, the rate is higher than initially quoted. Managing expectations is a big part of my job. In contrast to my recent experiences with rising rates, I am very happy to share that this week, rates are down. It no longer feels like the housing budgets I am reviewing are going to burst if we have yet another day of higher interest. Rates have come down some and here is why:
Our Fed Chair, Jerome Powell, has kept the Fed Funds rate steady for the past two months. We have seen revisions to the jobs reports and we know that there were actually fewer jobs created in August and September by around 101,000. The numbers for jobs came in under the forecast for October. Additionally, the number of hours worked was reduced by half an hour. With fewer jobs created, we saw a rise in the unemployment rate from 3.8% to 3.9%.
When the Fed raises the Fed Funds rate, it means that they are trying to slow the economy and halt inflation. So when they leave it as-is, we can breathe a little easier knowing that money might cost a little less and we can try to grow in a more balanced way.
If you are now under contract and have locked in the price for the home you are purchasing, you will be happy to know that home prices are forecast to have appreciated 6-8% this year, according to the Case-Shiller Home Price Indices. If you are still waiting on the sidelines to make your first or your next purchase move, now is the time to join those who are seeing their investment in real estate grow. Rates are down and home prices are still expected to grow even more this year.
I am, in general, an optimist so it’s easy for me to express myself during a week like this. With Thanksgiving around the corner, I will start expressing my gratitude early, thank you for tuning in to this report. Now go explore the housing market with joy and confidence.
Mark Thatcher, NMLS #1883412
Tel: 202-394-8469
Email: mark.thatcher@fairwaymc.com
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