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Each week on The Download, Inman’s Christy Murdock takes a deeper look at the top-read stories of the week to give you what you’ll need to meet Monday head-on. This week: As financial targets pave the way for interest rates to (finally) fall, the real estate industry is cautiously optimistic about a late-year boost.
It’s rare for sometimes-dry economic forecasters to get what you might call “giddy,” but this week’s economic news seems to have done the trick. Inflation numbers began to reflect already-falling rent rates, creating the circumstances that might (finally) lead to a drop in interest rates — and a commensurate boost to the real estate market.
“It’s finally happening,” wrote Jay Parsons, a real estate economist who has noted for over a year that falling rents showed national inflation would plummet.
In his testimony to lawmakers, Fed Chair Jerome Powell sounded a cautiously optimistic tone regarding the “considerable progress” the economy has made toward the Fed’s 2 percent inflation goal. “Reflecting these developments, the risks to achieving our employment and inflation goals are coming into better balance,” Powell said.
Rates are once again trending down after spiking following the June 27 presidential debate, as bond market investors who fund most mortgages are increasingly convinced the Fed will cut rates in September.
After flirting with 7 percent, rates for 30-year fixed-rate mortgages began to retreat, pulling back to an average of 6.96 percent on July 3, according to rate lock data tracked by Optimal Blue. Subsequently, rates on 30-year fixed-rate conforming loans have come down another 20 basis points, to 6.76 percent, as of Thursday July 11.
The CME FedWatch Tool on July 5 put the odds of a September rate cut at 78 percent, up from 74 percent on Wednesday and 64 percent on June 28. By Friday, July 12, futures markets put the odds of a September rate cut at 94 percent, and investors are pricing in a 52 percent chance that the Fed will cut rates by more than 50 basis points this year.
If lower rates bring on-the-fence buyers and sellers into the market, you’ll need to be up to speed on post-settlement rules and best practices. Fortunately, you’ve got expert Inman contributors to draw on for the real-world implementation and transaction advice you need now.
This week, we’ve got advice from a broker on outsourcing some aspects of due diligence to the experts, a coach on drilling down and finding a niche and, as Luxury Month rolls on, a tight-turnaround case study from an NYC agent.
Stop trying to be all things to your clients, broker Joseph Santini writes. Focus on the things that fall within your purview and direct traffic as needed on your transactions
Developing areas of specialization enhances service, efficiency, and effectiveness and results in greater professional success for both teams and individual agents, coach Verl Workman writes.
