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Tomorrow is CRITICAL for the Oahu Housing Market |
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Good afternoon, and happy Monday! All eyes are on fresh economic reports coming out this week - with results certainly affecting how the Federal Reserve will adjust interest rates moving forward. Significant volatility in the stock and bond markets is expected tomorrow.
Let’s win together in this market. Text me at (808) 228-5528. |
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Historically, results of new CPI reports are one of the most important benchmarks the Federal Reserve uses to contemplate policy moves. If tomorrow’s report comes in hotter than expected, the chances of another interest rate increase is great. On the other hand, a report coming in lower than expected signals that current hawkish policy may be successful in bringing down inflation.
So why should you care, and how does this affect Oahu housing prices?
Current market pricing signals no further rate increase this year, with a 0.75% rate decrease by the end of 2024. I’ve found most would-be buyers are waiting for mortgage rates to hit around 6%, before pulling the trigger. If tomorrow’s report leads to a future interest rate decrease, all the new buyers coming into the market at once will certainly lead to another real-estate “bull-run”.
Bidding wars, multiple offers, and ultimately higher real estate prices ahead. It would make sense to purchase now, beat the crowd, and ride the wave of future price appreciation? Either way, tomorrow is critical for the Oahu housing market moving forward.
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Today’s Rate Update with Pua
Mortgage rates began the day at the highest levels in nearly 2 weeks. The underlying bond market had been losing ground steadily since last Thursday and there was some follow-through to that negative momentum early today. Weaker bonds = higher rates, all other things being equal.
However, bonds recovered from 10am EST through the end of the day and the specific bonds that underlie mortgage rates did even better than their Treasury benchmarks. This allowed almost every lender to issue updated, improved pricing in the afternoon. With that, lenders were close to the rate offerings seen on Friday 11/10.
Uncertainty is expected as far as tomorrow is concerned: The Consumer Price Index (CPI) will be released at 8:30am EST and has the power to send rates sharply higher or lower depending on the outcome.
CPI is the most important inflation report for the bond market and one of the only pieces of economic data that can rival the big jobs report when it comes to market movement potential.
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