12/16 And The Dow Goes Wild
Massive Drop In Mortgage Rates, Market Remains Almost Completely Stagnant, The Fed Signals Cuts In 2024
This newsletter is 507 words and should take about 5 minutes to read.
Read last week’s newsletter here "12/9 Unexpectedly Strong"
The DOW Jones hit an all-time high. Powell announced that rate hikes are done. Blackstone dropped an insanely cringe holiday video. Tesla recalled millions of vehicles. US inflation expectations hit the lowest level since April 2021. Renters are getting concessions from landlords again. A news channel will use AI-generated anchors (literally fake news) And the NFL had its 1083rd “Scorigami” (a scoring combination that has never happened before) Thursday with the Chargers 21 - Raiders 63.
tl;dr
The Phoenix housing market remains stagant which is normal for the holiday season
The average mortgage rate has dropped almost half a point since last week amid this week’s Fed Meeting
Pretty short one this week. Other than the drop in mortgage rates, not much else has changed.
Phoenix
For Buyers: There is uncertainty mixed with hope in the market today as mortgage rates have declined from 8.0% to 7.0% since October. Every day the mortgage rate declines, more buyers can purchase. Last year, also from October to December, rates dropped from 7.4% to 6.1%. This was enough to pull the housing market out of a buyer’s market, into balance, and eventually a seller’s market once again by January. This put upward pressure on price until May, when rates rose once again to 7%. If rates continue their decline and drop below 6.5%, we expect to see noticeable improvements in buyer demand as we enter 2024.
For Sellers: Leading supply and demand measures indicate sales price measures should go flat over the next 3-6 months. Demand is expected to increase once the new year begins, but competing supply may offset it. Pushing the market too far on what price it’s willing to bear will most likely result in more days on market. Focusing on getting your home in the best possible condition, budgeting appropriately for buyer incentives, and managing expectations for price will get your home sold faster in this environment. These are the markets where quality marketing, exposure, and agent representation truly make a difference.
The Cromford Market Index is a gauge of Phoenix’s Supply and demand metrics. 100 is considered a balanced market. Anything higher than the 100-point benchmark is considered a seller’s market. Anything below 100 is considered a buyer’s market.
As of December 15th, 2023, the CMI has decreased to 104.2. Down 1 basis point from 7 days ago.
Supply has remained unchanged and demand has decreased by 1 basis point.
Rates
Mortgage Application volume has increased 7.4% Week over Week.
Purchase up 4%
Refinances up 19%
7-Day rate change: -49 basis points
YoY change: +28 basis points
Average interest rate: 6.62%
S&p500 vibe check
US stocks rose due to the 10Y yield’s decline below 4% and a surprise gain in retail sales
The Dow led indices with a 0.43% gain
30Y yield fell 14.5 bps
10Y yield fell 11.6 bps
2Y yield fell 9.9 bps
Meme, tweet, & fact of the week
Nintendo was founded in 1889. Before it sold video games, the Japanese company specialized in playing cards.