How's the Market?
The Bright Side of the Cooling Housing Market
Mortgage Rates - still historically low
Inflation is expected to get better in the 4th Quarter.
1.) After nearly two years of a highly competitive market, once rejected buyers finally have another chance to purchase that home they always wanted, even with higher mortgage rates making it slightly more expensive to buy. The slower market also means house hunters can start to include contingencies again, like appraisals and inspections in their offers. The August Market Stats for Montecito shows our market following the national trend. Where inventory is still low and prices are down slightly, the price per square foot is still climbing, and properties coming to market that are priced right are selling quickly to buyers who have been waiting for their chance to purchase.
2.) It used to be a guessing game with how much the Fed was going to hike interest rates, but the Fed has a reliable mole in Nick Timaros, who writes for the NY Post. He wrote that the Fed will be hiking the Federal Funds rate by 75bps in two weeks on September 21, which would bring the Fed Funds Rate to between 3% and 3.25% (currently 2.25% - 2.5%). Following that is the November 2 meeting, which will likely get the Fed Funds Rate near 4%. (MBS Highway 09/07/22)
The Fed Funds Rate affects credit card rates, lines of credit rates, bank savings rates… The Fed funds rate does not directly affect the mortgage rates. Mortgage rates are more directly impacted by investor demand for Mortgage backed securities. If the Fed can tame inflation, mortgage rates may trend down in the coming years. (MBS Highway 09/07/22)
3.) Inflation is expected to get better in the 4th Quarter. The Fed rate hikes are already having an impact on the economy and cost of goods, with a decline in many commodities from their peak. Goods account for 40% of the CPI inflation index and the examples of commodities that are showing a big decline are lumber down by 66%, wheat down 44% and copper down 30%. (MBS Highway 09/06/22)
4.) INSPIRATION | Japan was named as the healthiest country in the world by Money.co.UK : low pollution because of outstanding public transportation helps, low obesity rates, high protein, low calorie diets with fresh produce add up. So, here is my plug for visiting our local Farmer’s Markets for fresh produce. Santa Barbara has some of the best markets and it is so fun to see all our friends there and catch up with them while supporting our community. I bought a bag of salad mix and some fresh tomatoes and my salad for the past two nights has been beyond delicious. Run to the local farmers market and kill two birds with one stone.