Good Morning and Happy October!! We’re back with another market update.
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For a minute, let’s ignore the fact that the yield on the benchmark 10-year Treasury note hit a 7 year high with levels not seen since May 2011.
Instead, let us count the ways the economy is on fire: lowest unemployment rate in 50 years, expanding corporate profits, stronger than every consumer confidence and Americans now have more home equity than ever before at $6 trillion.
So why are new home sales slowing, new construction activity softening and homes sitting on the market longer and longer? Even though the economic fundamentals are in place, it looks like home buyers are reaching a point where enough is enough. Local experts in even the country’s hottest markets, like New York City, San Francisco, Denver, and Las Vegas are seeing a slowdown.
If rates continue to increase and home prices do not stall out, the overall cost to purchase a home could be well beyond the affordability of many American households. At this point, do we just bite the bullet and buy now or wait for lower home prices, even though interest rates will be higher?
Did you know that many states celebrated Columbus Day on October 12th as that was the day Columbus landed on the island of Guanahani in the Bahamas back in 1492?
That’s our market update, we’ll be back in two weeks!