Could Interest Rates Go Up Even More?! | Market Recap - May 31, 2024

hello and welcome to the Friday edition of the market update so hope you had an amazing week well right now it's a guessing game with interest rates so there is no clear indication if rates are going to go up or down and there is now some chatter that rates will actually go up so what's up with that we'll get into that in just a little bit but the economic indicators that primarily Drive interest rates are one inflation and two jobs and the core personal consumption expenditure pce which which is the fed's favorite indicator of inflation came out today and it was pretty much flat 2.8% nothing changed but the fed's target is 2% and we're a ways away from that now it is being extremely stubborn and not making a lot of progress so why would rates go up the challenge is how the pce inflation is calculated it is essentially a rolling 12mon average where they take month over Monon readings and they add all up together so in other words they add up each month-over-month figure so the April 2024 figure that just came out today replac the April 2020 uh 20 2023 figure so the challenge right now is looking ahead to the rest of the year we will be replacing some very low numbers throughout the rest of the year and that could actually if you look at some very conservative numbers move inflation up to over 3% by the end of this year which that doesn't help our interest rates so the other driver that could impact rates is the job market if the job market starts to falter and less jobs are created the unemployment rate will definitely rise and they don't want that to go over 4.2% the FED basically has a mandate to look at inflation and employment and try and keep them in this range so that the economy stays strong so when jobs are lost people just simply spend less money even those who have jobs because they're fearful that they could potentially lose their job in the future so it's really important for the FED to monitor the job market and see and make sure that it is definitely cranking along if it starts to show cracks the feds could potentially start to lower uh the FED funds rate which would lead to definitely lower uh mortgage rates and want to protect that job market from going into a jail a tail spin so jobs data comes out next week so we'll be watching very closely to see how strong it is now one wild card that is out there is whether the US government will step in and start propping up the mortgage back Securities Market MBS and that would be by buying mortgage bonds they're definitely going to start running off their uh balance sheet which is another big term we won't get into today but they indicated this will start in June so cross your fingers hopefully that will keep rates at least stable and potentially move downward so despite the persistently High interest rates property values just continue to increase the fhfa federal Housing Finance Agency released their house price index which measures appreciation on single family homes with conforming loan amounts and it showed a year-over-year increase in in March of 6.7% now that's Nationwide so buyers waiting for a crash I hear this a lot oh the Market's going to crash you know values are going to go way down they're going to be waiting for a long time and if they're waiting for interest rates to drop they still could be waiting a long time people need to move people have things to do and they don't want to stay stagnant keep educating your buyers and sellers to alleviate the fear of making the right decision indecision technically it leads to no decision they just don't they just freeze they don't make any decision so keep them informed on what's going on in the market and if you know if they know what they are getting into and understand the Dynamics of our current real estate market they can go in with their eyes wide open and be prepared for the long run they know what they're getting into they know they might have to pay a little bit of a premium on their mortgage payment right now but longterm they could potentially lower over that that uh interest rate and their mortgage payment hope you have an amazing weekend and we'll see you next week this is Gaylord out bye everybody

Channel: Gaylord-Hansen Team at CrossCountry Mortgage

Views: 18

Keywords: mortgage, home financing, home loans, real estate, first-time hombuyers, san diego, las vegas, arizona, mortgage rates, mortgage rates today, home buying, homebuying, housing, interestrates, mortgagemarket, homefinancing, mortgagerates, mortgageratesdaily

Id: cba2UESGZ2w

Length: 4min 44sec (284 seconds)

Published: Fri May 31 2024