The Fed kept rates steady (again), but said that a rate cut on Sept 18 was definitely “on the table” given progress on inflation and the recent rise in the unemployment rate. The bond market rejoiced, helping to send average mortgage rates near 6.6%. Hope you enjoy this encouraging news.
Mortgage rates drop
The US treasury and mortgage markets don’t have to wait for the actual Fed rate cuts – they respond to new information (in this case, quite dovish) immediately. The yield on the 10-year US treasury has dropped from 4.3% to under 4.0% in just over a week, and that’s helped average 30-yr mortgage rates drop to 6.62%. Finally, affordability is improving! [Source: Mortgage News Daily]
The rate cuts are coming
The Fed kept short-term interest rates on hold (target range of 5.25-5.50%) for the 8th-straight FMOC meeting. But Fed Chairman Jerome Powell’s comments during the press conference suggested that solid progress on inflation and the recent rise in the unemployment rate above 4% put a September 18 rate cut “on the table”. [Source: Federal Reserve]
Another price record
Apart from a few big metros, home prices keep rising. The latest Case-Shiller data for May 2024 showed that the national home price index rose 0.3% month-over-month. That means that prices have already risen 1.8% in the first five months of the year. Annualize that, and you’d get 4.4%. The ‘cost of waiting’ for lower rates has been brutal: home prices have risen 14% in the last 2.5 years. [Source: S&P DJI]
Local Market Trends
As of Friday, August 2, 2024
| Area | Median Price | Active Listings | New Listings – 5 days | Median Days on Market |
|---|---|---|---|---|
| Scottsdale, AZ |
$990,000
-0.2%
|
1701
0.1%
|
118 |
66
0%
|
| Gilbert, AZ |
$669,000
0%
|
553
0%
|
55 |
44
0%
|
| Phoenix, AZ |
$490,000
-0.1%
|
2882
-0.2%
|
277 |
47
0%
|
| Mesa, AZ |
$495,000
0%
|
1042
0.1%
|
95 |
44
0%
|
/) from Jul. to Aug. 2024.
