This week is packed with market-moving headlines, and if you’re thinking about buying or selling, these data points will be essential to monitor. After weeks of volatile swings in bond prices and rising mortgage rates, we’re all hoping for some welcome relief. Let’s dive into what’s coming up and why it matters.

Tuesday’s Key Reports:

• Case-Shiller & FHFA Home Price Indexes: These reports will give us valuable insights into current home price trends across the nation, helping us understand whether the market is stabilizing or shifting.
• JOLTS Jobs Data: Expect a forecast of 7.99 million job openings, just under last month’s 8.04 million. Strong job numbers impact economic confidence and housing demand.
• CB Consumer Confidence: Consumer sentiment plays a massive role in spending habits, including decisions to buy or sell homes. This report will indicate how optimistic or hesitant people feel about the economy.

Wednesday’s Updates:

• Q3 2024 GDP (First Reading): We’ll get an early estimate of economic growth. If the economy shows signs of slowing, it could influence mortgage rates.
• ADP Employment Report: The estimate is for 115,000 new jobs, down from 143,000. A weaker report may calm bond markets.
• Pending Home Sales: This report is critical for predicting future sales activity. It shows how many contracts were signed, offering a peek into what’s ahead for the housing market.

Thursday’s Financial Indicators:

• PCE Inflation Data: The Fed’s go-to measure for inflation. If it shows limited inflation growth (expected to be around 2.1% YoY), it could ease bond markets, which is good news for mortgage rates.
• Initial Jobless Claims: A weekly update on the labor market’s health, giving clues about employment trends.

Friday’s Big One:

• BLS October Jobs Report: With expectations of 123,000 new jobs compared to last month’s 254,000, a more subdued report could relieve pressure on bond prices. It’s a key indicator since September’s job numbers caused mortgage rates to spike, so this will be one to watch closely.

The Federal Reserve will have its eyes on these numbers, and so should we. If inflation remains steady and the labor market softens, we could see some stabilization in mortgage rates. But as always, any surprises might stir up market dynamics. Currently, the average 30-year fixed rate is sitting at 7%, so we’re all watching closely for any signs of relief.

Understanding the National Debt & Mortgage Rates

You might be wondering: With the Fed having cut interest rates, why haven’t mortgage rates improved? Before the Fed’s September 18th rate cut of 0.50%, the 30-year mortgage rate was 6.11%. Today, it’s at 7%, the highest since July. Let’s break down why.

The Debt Dilemma: Over the past five years, our national debt has skyrocketed by 56%, reaching $35.8 trillion. This spending spree means the government has been printing more money. In fact, 2024 alone saw a $1.83 trillion deficit, with money printing surging by 2.6% in the last year, the highest increase since August 2022.

Impact on Bond Prices & Mortgage Rates: More money in circulation often leads to inflation. To manage inflation, the Federal Reserve raises interest rates, but that pushes mortgage rates higher. At the same time, as the government issues more bonds to cover its spending, bond prices drop, which further drives up mortgage rates. It’s a cycle that makes borrowing more expensive, affecting all of us who are eyeing the housing market.

The Long-Term Picture: Without a solid plan to manage national debt and deficits, we’re likely to continue seeing upward pressure on rates and inflation. This not only influences mortgage rates but also the cost of everyday borrowing for consumers.

Homebuying Trends in an Election Year

Considering buying a home or investing in real estate? Here’s how the upcoming election year could shape the market. History shows that home prices generally stay stable during election years, with no clear pattern of major rises or falls. However, there are some trends worth noting:

1. Interest Rate Volatility: Rates can be jumpy in election years. Investors’ reactions to uncertainty cause fluctuations, and the Fed often avoids big rate moves close to the election to remain neutral.
2. Seasonal Slowdown: Many buyers and sellers hit pause in the second half of an election year, waiting to see the outcome. This can lead to a quieter market but usually picks up post-election.
3. Inventory Constraints: Sellers often delay listing homes, tightening the supply. Builders may also hold off on new projects due to economic uncertainty.
4. First-Time Buyer Hesitation: Entry-level home sales sometimes dip, as first-time buyers tend to be more cautious during election cycles.

Despite these patterns, the underlying issue remains: low inventory. With a housing shortfall of 3.3 million homes, prices are expected to stay strong. Even in the face of election-year jitters, demand keeps pushing forward.

Stay tuned as we navigate these twists and turns together. If you’re planning to buy or sell, staying informed is key. Let’s keep a close eye on the market and make the best decisions for your future.