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December 1, 2023

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December 1, 2023

Rates Dropped This Week! What Can We Expect Next?

Market Update

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Exciting news on the mortgage front! In the past 45 days, mortgage rates have come down almost 1%!

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Could we be on the verge of breaking out of the 7% range and slipping back into the 6% territory next week? Stay tuned!

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This week, we had some positive inflation news with the PCE, the Personal Consumption Expenditure, which is the Fed's favorite report of inflation. However, there are still concerning signs in the job market as continuing jobless claims reached over 1.9 million, which is the highest level in over two years. In other words, it's where individuals who have lost their jobs are facing challenges in securing new employment.

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Looking ahead to the upcoming week, it's crucial! We have job numbers coming out from ADP and the Bureau of Labor Statistics. If those are weak reports, it could contribute to a further decline in mortgage rates.

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On a different note, last week's GDP figures showed a robust economy with ongoing consumer spending over 5%. Unbelievable! However, there are questions about the sustainability of this trend given that the consumer debt has surpassed $1 trillion in savings - near historic lows.

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Bill's theory is that we have what's called the home wealth effect. As home values have continued to rise, people find themselves with substantial home equity providing a safety net in case they exhaust their savings. Will this lead to an influx of homes on the market next year? Stay tuned for more developments in that.

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But some people may have to sell their home just to get out of debt. So now is the time to prepare your buyers to make a move. Data indicates that a 1% drop in rates can attract upwards of 3.5 to 5 million potential homebuyers into the marketplace because of better affordability.

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Buyers are adjusting to the new norm of higher rates, and they're going to start taking action next year.

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Here's one last interesting stat to ponder: According to a recent Atom analysis, January 9th was identified as the single best day to buy a home, offering the best deals of the year. And we all know January 9th is right around the corner!