Jobs Numbers
We were anticipating about 160,000 jobs to be added in August, but nonfarm payrolls only rose by 142,000. This bodes well for a 50bps rate cut from the Fed in a couple of weeks. Per usual though, the real news here is not the headline. It’s what was in the report. More revisions. Just another 100k for the past two months. Guys. GUYS! Twenty percent of the jobs reported this year, never actually happened…
Moving on. The unemployment rate went down by one tenth, which is likely why we haven’t seen a huge improvement on mortgage bonds or rates today in reaction to the report. There are arguments that this number is also faulty because while the labor force increased 120,000 and we lost 438,000 jobs (more jobs created than increase in laborers means unemployment improved), the big but is that we added 527,000 part-time jobs. Meaning unemployment went down because people took part time jobs. Is that because they couldn’t find full-time work? If so, unemployment should be a bigger concern.
September Fed Meeting
Will mortgage rates improve half a point when the Fed cuts their Fed Funds Rate by 50 bps?
Nope. And if they only cut 25 bps, we could actually see mortgage bonds react poorly which would drive interest rates up on home loans. It’s very important to remember that the market already built in four rate cuts for this year, back last winter. Even after this year’s turbulence in the bond market, a rate cut in September has been a give in for a few weeks now – so the market has already reacted, and we have already seen an improvement in rates.
Election
A survey done by Veterans United Home Loans found that 40% of prospective real estate buys were pausing their search and waiting until they knew election results. Why? That’s hard to answer, especially since we know the election won’t change much when it comes to housing or even monetary policy.
The candidates are going hard on it though. It’s a good, polarizing, even triggering topic to get people riled up about. Especially when we talk about the big bad guy – institutional investors. Both candidates are talking about how they will make housing affordable again, but the truth is there is only one way to do that. More housing. Which you and I know is no easy task. But if I were to oversimplify it, I could ask you – do you want more homes in your neighborhood? It would help your kids be able to buy a home someday but initially it would mean more traffic in your area, more density and it might even bring down your home value a little.
I’m going to go out on a limb and say your answer would be no. And while I have discussed my own theories on the media and ultra rich wanting to turn America into a nation of renters, I can’t argue with the data.
The data, the cold hard numbers, show that institutional investors do not (yet) own the majority of homes in America. No seriously. They only own 2-3% of the total single family rental housing stock. That number is rising but it’s lower than I thought. It’s a lot lower than politicians want you to think.
Real Estate at Year End
There are people who need to buy or sell a property before 2025. If they fall into the 40% we discussed above, they are really going to be in a time crunch to identify and close on a property between November 5 and Dec 31st. Typically, and by typically I mean me personally, I see a tick up on loans closing in December for all my investors but also some families who for a variety of reasons decide to pull the trigger before the new year. Listings on the market in November and December are typically motivated sellers. Realtors also like to make money before the year end. So deals start coming together in time for Christmas.
As a buyer, this is a major opportunity to strike. If you aren’t sure how to be ready, check out my tips here. As a realtor, this is information you should be literally screaming from the rooftops.
Important Upcoming Dates:
Mortgage and Mimosas will be on September 26 and the topic is especially timely. I’m bringing in a very special guest to help you craft your elevator pitch but we’re rebranding that and putting it on steroids. We are going to teach you how to quickly and confidently deliver your unique value proposition so that the person hearing it has no doubt who their realtor now is.
This will help you with networking events, listing presentations, your content aaaand getting a buyer broker agreement signed without feeling slimy.
Future is Female is October 17th and tickets are available. So are sponsorship opportunities.
And sometime in October…the grand opening of 18 on Lakeside. Leave a comment with the word inventory if you’d like us to keep you in the loop on this happier way of living.
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