Interest Rates Dropped Going Into Memorial Weekend

The Double Comma Club

It's not Tuesday, but I've got news that I want to share. And I know I've got market trends tomorrow, but rates went down, and I need to know that, you know, that especially going into Memorial Day weekend, how much did they go down? Why did they go down? And are they going to go down further? I mean, that's the question, right? Because is this a new trend or is this just a blip? And it's really critical that we jump in because I know something's coming, we all feel it. And I'm going to be talking about this at tomorrow's Market Trends Update. What are all the indicators that are pointing us clearly towards an economic slowdown? And that economic slowdown is more than likely going to come with a reduction in interest rates, which is going to give us an opportunity to refinance. But almost more importantly, it's going to spark more demand.

The demand that right now is sitting on the fence, the demand that is going to get excited about in streets, dropping and get into the market still on limited supply, which is going to create another market frenzy in an increase in appreciation. So do you want to be a home buyer during that market frenzy or a homeowner? I want to own more like I want my, I want the market to raise the value of my properties, not me fighting for a property, having to put more into the offer. Because right now you can actually offer a list. Some homes you can offer at below-list. Some homes have been on the market for the last three months. That's what I want to talk about. This is going to be really specific, really quick, going into Memorial Day Weekend. I want you to know what's happening with interest rates.

Of course, we still have tomorrow and I don't know what tomorrow brings until it comes. You tell me if your crystal ball's better than mine, but I wanted to talk to you about the fact that rates dropped. Now, they dropped a quarter. How big of a deal is that? I mean, rates have been going up for 10 consecutive weeks. We hadn't seen this since 1994 rates increasing this much in such a short period of time. So to have any relief to have a week when the rates went down is a blessing and we're going into a long three-day holiday weekend. So wait, rates went down about a quarter, and that quarter can save you about a hundred dollars a month. Is that a massive deal?

It could move the needle, especially if you're right up against the edge of your eligibility. So locking in this weekend could get you just a little more house. So what's the inventory. What does that look like? But let's talk about these interest rates and whether or not we feel like they're going to go down or up for June, right? Cause what's, what's affecting interest rates right now. As I started this off, is this going to be a change in trend or is this going to be just a blip? And here's what I think. I think that interest rates are going to continue to be volatile through the point in time when the fed starts to pull their foot off the gas and takes a pause. Right? And that could be September-ish. In fact, one of the fed members actually said that they're thinking that they expect a 50 PIP increase at their next meeting in June.

They're expecting five more increases this year with a possible pause in September. So we might start seeing things shift right about then, but until then, this is not a downward trend. This is an opportunity. This is a door that opened next week. We could see that they go back up, but that quarter, that a hundred dollars. I don't want you thinking that if you don't lock in this weekend, you've lost the opportunity because you can't time. The best time to buy is today. But can I take advantage of the dip? Of course you can, but here's where we're going. So the fed, I just talked about, we're expecting five more fed rate hikes. Those are going to impact slowing down the economy. We're going to see impacts on the 10-year treasury and on the 30-year fix because of that, they're also trying to control inflation and as inflation continues to be high, even if it comes down slightly, the core of inflation is wage-based and housing-based.

And right now those two are not giving up easily. As long as inflation is high, that's going to put upward pressure on interest rates, but then you also have the geopolitical issues that are going on right now. When China opens back up again, what is that going to look like? Will we see another COVID uptick? And will they shut down again? Will the supply chain get crunched what's happening with Russia and Ukraine? Those geopolitical concerns raise the risk. They have an effect on the stock market. You have a risk-based move where people have a flight to safety. They want to move from the stock market to bonds. And when that happens, we actually see that while the stock market goes down, people move their money over to bonds. Those prices go up in bonds, which actually lets interest rates go down. So I have inflation. That's pushing interest rates up.

I have geopolitical risks and concerns and the stock market risks that might put rate might push rates down. I have competing factors that are going to continue to create volatility, but those blips and that movement, I would expect to hover between 5, 5.25, and 5.5%. Now remember, we're locking in jumbo loans in the high fours right now, right? So this is an opportunity to take advantage of, but if we're volatile within this range until the point in time where the fed pauses, I want you to continue to watch for that. I'll continue to talk about that. Where's the fed going, because right now they have the most impact on rates. But did you recently sign a lease? Did you get out of the home buying experience because you don't have 50,000, a hundred thousand dollars over asking, do you not want to bid against five 10 people?

Do you know that because of the higher interest rates, demand has slowed down, it has it slowed down. So this last week over week mortgage purchase application data showed that demand went down 1.2% week over week, last week, it went down 11% week over week. And in fact, out of the last, what is it out of the last 11 weeks nine have all been down, slowing down demand because rates have been higher. So that demand is slowing down. I don't know if I want to buy that second home anymore. I don't know if I want to buy that investment anymore. Now might not be the right time to purchase a home. I'm going to wait for the bubble. I'm going to wait for the recession.

Going into Memorial day weekend rates dropped ever so slightly, but take advantage of it. Demand is down. I have real estate agents that are talking about the fact that they have homes that have no showings homes that have not gone under contract in one or two weekends. What does that mean for you? Opportunity to come in with an offer with an FHA, with a VA, with down payment assistance you can get in with no additional over list ask. That's brilliant. And I don't know if you knew that because demand is down at the same time. Supply is up. So active inventory was up in the past DMAR market trends report showing April data. It was up 44% month over month. Now that was active inventory and that's a little bit dated at this point next week, we're going to get made data super excited about that.

But if I look nationwide week over week, we just saw 8% growth in inventory. Now, this is not going to be a continued spike in inventory in the sense that we are in the season, where more inventory comes online. This just so happens to be colliding at the same time. These rising interest rates slowing demand a little bit allowing first-time homebuyers to get in. Plus a seasonal increase in supply is giving us opportunities to not have to go over asking you to add onto that. What the roof team advantage is all about. You add to that, the fact that we're doing the TBD underwrites with eight to 10-day closings, and we're waiving loan availability. We're running automated underwriting to see if we can waive the appraisal. We're giving you a refinance certificate to give you money off of your refinance. Next year, when the rates go down, when we hit a recession and now we're partnering with agents doing a lease buyout program, and this is why it's not because I need to have a sale to get more deals in the door.

I so believe in homeownership. I so believe in this is the opportunity for the 80% of Americans to gain wealth, to gain stability. And you've been shut out this whole year because rates have screamed up so fast. It's freaking everybody out. We have such a lack of inventory. When I say that inventory is up 44%. I mean that is a number that's 3,200 homes for sale, 3,200 homes for sale. I mean we have over 3 million people in the Denver market, and 3,200 homes for sale. That number is big because the actual unit count is low. Our inventory is still low. This 5% interest rate is still historically strong. So when you have a window of opportunity and you don't know about it, I'm not doing my job because this is a time that you can get in. This is the way did you know that just last week we saw record sales on art and cars.

I mean a 1911 Mercedes just sold for the highest price car ever sold the rich know something. They know that they need a hedge against inflation. That inflation wall might come down is not going to go away for a period of time they need to make sure that their money is making them money. They're pulling it out of the stock market and volatile investments and putting it into solid investments like our, uh, art and classic cars. What do they know that you need to know? You need to know that you need a hedge against inflation and for the 80% of Americans, it's real estate, it's real estate. That gives you the opportunity to do that. And this is the way and with our routine advantage, the lease buyout, because if you gave up six months ago and I get it, I get it.

But how do I get you back in? How do I share with you the power of real estate? The opportunity to allow appreciation to drive up your wealth, the opportunity for principal reduction to pay your own mortgage. Not somebody else's because when you are paying rent, you're paying a 100% interest rate. I stole that from Jeremy Kane, when you're paying rent, your interest rate is 100%. None of that is making any money for you.

So if you lock in at today's yes, but historically low-interest rates, you're making your money work for you. Take advantage of these. This is your weekend. This is your time we want to go to work for you. Give us a call right now, The Ruth Team, Nicole Ruth, it would be my pleasure to serve you guys have a great rest of your day. If you're an agent, catch us tomorrow with Megan hour on our market trends, update, talk to you then.