Inflation comes in LOW compared to expectations. this is why It's awesome for real estate.

The Inflation report is out for the month of October. The expectations were 7.9% YOY, 0.6% MoM CPI, & CPI Core 0.5%. 

Traders work on the floor of the New York Stock Exchange

We beat expectations with 7.7% YOY, 0.4% MOM CPI, and 0.3% Core CPI. This is GREAT news and collectively, so, markets rallied Thursday & Friday. In addition, the 10-year treasury fell 30 basis points to around 3.8% *This directly affects mortgage rates*. I got reports from lenders that rates had come back down to the low sixes after this news. 

This is great news for real estate, if we can sustain this rally. Markets are going to be hesitate until we see this trend continue. Most likely, after this month's CPI report comes out December 13th. This comes right before the Federal Reserves' last meeting of the year. If we get two really low inflation reports, the thought is the FED will be more 'dovish' in its December rate hike. 

Here is the summary:

While inflation coming in low, rallying markets and falling treasuries is good for real estate― We desperately need a good report in December to remain on this bullish trajectory. If we see bond yield's peak and continue to fall, this could mark a floor in real estate pricing fairly quickly, as investors will look to time the future Federal Reserve pivot. 

Posted by Carson Hulak on
Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.