Lowest Inflation in Three Years

Rates dropped last week following the lowest inflation reading in three years. With these recent rate drops and our lender or seller-paid buydowns, homeowners could see rates as low as 4%. This is a significant incentive for buyers on the fence. Let’s connect and strategize.

What You Need to Know
Data Check:  
Inventory continues to grow but slowing. (Altos) Price reductions: Up to 38% of active inventory. Up another 0.3% last week. (Altos) Rates: Rates dropped to 6.8%. May stay below 7% this time. (Mortgage News Daily)   We continue to see local markets diverge in terms of supply and demand.  
For Buyers: Lower rates and higher inventory make now a compelling time to act. Home values are likely to remain strong throughout this cycle due to the lock-in effect. It’s a great opportunity to make a deal on a home.
For Sellers:
We are at a pivot point for regular seasonal corrections. Many markets are already seeing inventory growth and significant price reductions. Sellers need to act like builders and offer incentives, including seller-paid buydowns.  
Financial Market Update

Inflation Shows Signs of Softening The headline inflation number dropped to 3.1%, slightly below expectations and the lowest level in three years. As a result, rates dropped heading into the end of the week. However, the Producers Price Index, a measure of inflation in the manufacturing sector, increased more than expected. While the CPI number is a good sign, we aren’t ready to celebrate the end of inflation just yet.

This week, we will see data on retail sales, housing starts, and initial jobless claims. These are not expected to move the market significantly but may cause short-term volatility.

Where do we go from here? Headlines might suggest this is the start of a downward trend in rates. However, Jamie Dimon, CEO of JP Morgan Chase, reminded us that “inflation and interest rates may stay higher than the market expects.”

We recommend discussing the cost of waiting with your potential buyers and ensuring they understand the risk of delaying their decisions.

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