A Perfect Storm for Mortgage Rates | TheRuethTeam.com

As we watch rates going back up again, the beginning of November is teeing up to be the perfect storm for mortgage rates. Now, I don't want to be a doomsday crier because personally, I remain extremely optimistic about the future of the housing market and where things could actually land for 2024 and kick off 2025. However, it would be naive if we didn't go into the next few weeks with eyes wide open, especially as we're watching rates going back up again. So in today's video, I'm going to cover the convergence of three critical events about to take place just days apart from one another and how the outcomes of each could impact mortgage rates and your home buying journey. But before we dive in, if we haven't met, I'm Nicole Ruth, wealth builder, real estate investor, and mortgage professional of over 23 years. If you find any value in this content, please hit that thumbs up button so that this video can reach more viewers just like you. And also subscribe to my channel so you don't miss any of the weekly housing market and mortgage updates. So November is shaping up to be one of the most volatile periods for mortgage rates that we've seen this year. And it's not just due to any one thing. It's the convergence of several key events all happening at once. First, the presidential election on November 5th with Kamala Harris and Donald Trump going head to head. This election has considerable implications for the future of US policy. And many people, as we know, are holding off on making any major financial decisions until the results are in. Now, I went into depth about the election and its impact in this video right here. The uncertainty of this election is already ripping through the markets. And that's just the beginning. Just a few days before the election on November 1st, a significant jobs report is scheduled to be released. Now, this is a big one. The jobs report is a critical measure of the economy's health. And it's going to provide a signal of where things are headed. We had been seeing a clear trend line of a softening labor market until last month's job report, which defied the trend. And it set mortgage rates soaring. If the numbers come in strong and unemployment drops again, like they did last month, we could see inflation fears ramp up, pushing bond yields higher and dragging mortgage rates right along with them. The reason for this is we have been seeing a trend of softening labor. Last month, we saw major revisions to the previous two months and a higher than expected 254,000 jobs created. We also saw unemployment decrease to 4.1 and wages increase to 4%. On the flip side, if the jobs data comes in weak, it could ease inflation concerns, but it could also raise alarms about the economy slowing down, making rates even more unpredictable. It feels a bit like a lose-lose proposition. And as if that wasn't enough for the week, two days after the election on November 7th, the Federal Reserve is meeting and announcing their next rate cut decision. After the surprise 50 BIP rate cut at their last meeting in September, the markets have been selling off bonds, resulting in a run-up of rates. As of this morning, the markets believe there's an 11% chance that the Fed might hold steady in November, at least according to CME FedWatch tool. But here's the thing. Markets don't wait for the Fed decision. They move in anticipation of it. So depending on how the job report plays out, we could see rate movements even before the Fed makes their official announcement. The intensity and magnitude of these events is why there could be big swings in mortgage rates over just a few days. Historically, elections alone don't always cause massive shifts in mortgage rates. They don't. But in this particular election, it's about as polarizing as they come and is reminiscent of the 2016 election when Donald Trump's surprise win sent mortgage rates up almost half a percent in just a matter of weeks. In a race like this, where the stakes are high and the political climate is tense, the markets could react even more dramatically than expected. So what does all this mean for buyers and sellers right now? Well, in a volatile market like this, opportunities lie in understanding how to navigate the uncertainty. Buyers who are ready to make a move but have been waiting for the perfect moment could actually benefit from the swings. If rates spike temporarily, it might force competition to remain on the sidelines, making negotiations more favorable for a buyer. And if rates drop after these events play out, locking in at the right time could mean major savings. And for sellers, especially those who have been waiting for the right buyer, this volatility may create a sense of urgency for buyers who don't want to risk waiting and end up with a higher interest rate. The market dynamics right now are shifting towards a buyer's market, but smart sellers can still capitalize on the unpredictability by pricing strategically and staying flexible. This is an uncertain time, but it's also one that creates opportunities if you are ready to act and stay informed. As always, knowledge is power, and having the right information can put you ahead of the curve. So stay tuned, stay focused, and let's finish out this year strong. And remember, bigger visions create certainty in the midst of volatility. If you have any questions, please drop them in the comments below. And if you want more key insights on the housing market, check out this video I have linked on the screen now. And I'll see you next time.