Where’s the Real Estate Market Headed?
We all know that inflation isn’t tamed overnight. It takes time for the tools the Federal Reserve Board (FRB) has to take effect. Since I’m in the real estate business, I see the effects of the changing rates on a weekly basis (if not daily).
One key indicator is the 10-year T-Bill (Treasury Bills). The mortgage rates respond to this more than any other indicator. Typically, when the 10-year T-Bill goes up, the mortgage rates go up. And when the 10-year T-Bill goes down, the mortgage rates go down. On Mar. 4th, 2022, the 10-year T-Bill was at 1.74% and mortgage rates were in the 3% range. Today, the 10-year T-Bill is at 3.11% and the mortgage rates are closer to 6%. It’s not an exact science. The rates fluctuate. They even move without the Federal Reserve Board actually raising them. Like I mentioned in a previous Newsletter, sometimes the rates jump just because the investors ‘think’ the FRB is going to raise their rate. The market (stock market) is not real stable right now.
As for our housing market, we’re seeing more and more homes come on the market (for sale). Nothing out of the ordinary, but the inventory is inching up. As of right now, GAVAR (Greater Antelope Valley Association of Realtors) shows and inventory of 1,086 homes for sale. Back on March 4th, 2022, we only had 489 homes for sale.
The good news is… homes are still selling. Historically, the mortgage rates are still on the low side. PLUS, rental prices are going up. If the interest rates continue to rise, it may put downward pressure on home prices. Watch the 10-year T-Bill. I wouldn’t be surprised if the Federal Reserve Board Over-reacts and causes ‘deflation’. A little, we’re ok with, a lot, not so much.
If you have any questions regarding this or any other real estate related matter, feel free to call, text, message me or email me, and I’ll be glad to help.
Take care and be safe out there.