As some of you may know, the Fed met earlier in the week to discuss the Fed economy, nameless inflation. The Fed’s comments spooked Wall Street as they stated they may raise rates in August rather than leave them alone due to the strong jobs report as well as the consumer price index. No one outside the Fed thought would happen as many analysts were predicting cuts in the third quarter and beyond.
Mortgage rates jumped as buyers planning to purchase had to rethink their spending as their payment may have increased. There is very little refinancing taking place so it’s a “purchase money market”.
Consequently, with limited inventory, the mortgage industry is hurting. Layoffs or even some lenders have left the mortgage lending arena. Boston still remains hot as the medical boomed, and pharmaceutical companies continue to grow.
My crystal ball sees a slowdown of jobs and the higher rates effecting consumers in most areas but real estate. I do believe rates will drop in the next 1-2 to starve off a recession. Home values will remain intact in many areas of the country—still a strong real estate market.
John Gouley, Creator
ML# 482827