It is near impossible to impress folks these days.
I was a guest speaker at an event this week and the speaker before me was discussing how hard we’ve all become to impress. He was talking about an experience at a luxury hotel, where the whole room was “smart.” You put your phone down here and then the TV starts playing music from your most recent playlist and so on. He was pointing out that in the 90’s our minds would have been blown but now we are like meh.
I was thinking about this dilemma and how it really is hard to wow people anymore. Sure technology has advanced at such a rapid speed and that explains a lot of it. But truly, everything has become so crazy and unexpected that it is not just about being impressed, it’s like you cannot shock us anymore either. The world has become astounding in all ways.
And that is how the markets felt about the CPI numbers yesterday. Unimpressed.
(You like that segway?)
Decembers Consumer Price Index showed that inflation rose three tenths of a percent. ROSE?! WHAT?! No, no don’t panic. We were expecting it would rise. Markets were expecting a two tenth increase. So it was just a little hotter than expected but you know…Santa came to town and he’s not cheap to host.
The markets didn’t freak out about this, in fact mortgage bonds are doing well. It seems investors have drunk the rate cut Kool-Aid and don’t care what the data shows anymore. They believe the Fed will cut rates this year. PPI came in this morning with inflation friendly data – showing producer inflation fell one tenth in December. More notable, the core rate came in at 0%.
Now half the world votes this year in major elections. The UK, Pakistan, India, Mexico, Russia even the European Union is choosing new leadership in 2024. Of course this impacts global economics. Let’s look at our situation at home. Almost daily I speak to someone who is convinced the current administration will not let Americans hit the polls in November after a poor man’s summer. They want people buzzing around this summer and any memories of financial woes to be far in the rearview mirror. So there could be pressure on the Fed to cut rates in March.
Inflation readings are also predicted to be friendly for a rate cut in March, especially since Powell said inflation doesn’t have to hit their 2% target before they cut. It seems economists think we are more likely to hit that target by their May meeting.
Mortgage Applications are up.
The data shows that more consumers are applying for a mortgage each week. Purchase applications are up 5.61% this week, from last. Refinance applications are up almost 20% week over week, and 30% year over year. I can personally attest to that. We’ve had a big jump in activity here. One bummer has been that we’ve also noticed way more applicants struggling with credit issues and debt. It is not surprising, considering what 2023 was like financially and mentally. It was tough for most. It is something we are leaning into though and working very closely with borrowers to repair so that they can achieve homeownership this year.
This is where a solid real estate team comes together. Almost everyone has a hurdle to overcome in order to achieve homeownership or begin investing in real estate. Which by the way, is not a flashy lifestyle. Check out this video I made about being a poor investor. It’s a slow and steady way to build real wealth though. Anyway back on track to your goals for this year. Sometimes the hurdle a buyer has to clear is a tough market – higher interest rates and limited inventory. Sometimes it’s a credit issue from that ex you never should have dated in the first place. Sometimes it is too many musical festivals, not enough time (or money!). The thing is that homeownership is the American dream but not the American reality. It requires some effort to achieve which is why not everyone does it.
You need to find a realtor and lender who are in it to win it with you. Whether that’s a three-month journey or a longer one. Do not hesitate to ask for more guidance on how to optimize your loan application. And if you are meeting resistance on that front, or feel dismissed, don’t mail it on your goals. Just fire that team and find someone who wants to play on yours.
Surround yourself with winners.
You are who you hang out with right? So plan to hang out with us at the next Future is Female, here in Reno on March 7th. The event will be from 2-6pm at The Virgil. We will start with a panel of female realtors from all over the country, who have very unique investing strategies. They practice what they preach and use real estate to grow their own wealth. Then we’ll jump into tactics, with workshops to show exactly how they do what they do. Tickets will go on sale soon!