What To Look For From This Week’s Fed Meeting

You may be hearing a lot of talk about the Federal Reserve (the Fed) and how their actions will impact the housing market right now. Here’s why.The Fed meets again this week to decide the next step with the Federal Funds Rate. That's how much it costs banks to borrow from each other. Now, that’s not the same thing as setting mortgage rates, but mortgage rates can be influenced through this process. And if you’re thinking about buying or selling a home, you may be wondering about the downstream impact and when mortgage rates will come down.Here’s a quick rundown of what you need to know to help you anticipate what’ll happen next. The Fed’s decisions are guided by these three key economic indicators:The Direction of InflationHow Many Jobs the Economy Is AddingThe Unemployment RateLet’s take a look at each one.1. The Direction of InflationYou’ve likely noticed prices for everyday goods and services seem to be higher each time you make a purchase at the store. That’s because of inflation – and the Fed wants to see that number come back down so it’s closer to their 2% target.Right now, it’s still higher than that. But despite a little volatility, inflation has generally been moving in the right direction. It gradually came down over the past two years, and is holding fairly steady right now (see graph below):The path of inflation – though still not at their target rate – is a big part of the reason why the Fed will likely lower the Fed Funds Rate again this week to make borrowing less expensive, while still ensuring the economy continues to grow.2. How Many Jobs the Economy Is AddingThe Fed is also keeping an eye on how many new jobs are added to the economy each month. They want job growth to slow down a bit before they cut the Federal Funds Rate further. When fewer jobs are created, it shows the economy is still doing well, but gradually cooling off—exactly what they’re aiming for. And that’s what’s happening right now. Reuters says:“Any doubts the Federal Reserve will go ahead with an interest-rate cut . . . fell away on Friday after a government report showed U.S. employers added fewer workers in October than in any month since December 2020.”Employers are still hiring, but just not as many positions right now. This shows the job market is starting to slow down after running hot for a while, which is what the Fed wants to see.3. The Unemployment RateThe unemployment rate shows the percentage of people who want jobs but can’t find them. A low unemployment rate means most people are working, which is great. However, it can push inflation higher because more people working means more spending—and that makes prices go up.Many economists consider any unemployment rate below 5% to be as close to full employment as is realistically possible. In the most recent report, unemployment is sitting at 4.1% (see graph below):Unemployment this low shows the labor market is still strong even as fewer jobs were added to the economy. That’s the balance the Fed is looking for.What Does This Mean Going Forward?Overall, the economy is headed in the direction the Fed wants to see – and that’s why experts say they will likely cut the Federal Funds Rate by a quarter of a percentage point this week, according to the CME FedWatch Tool.If that expectation ends up being correct, that could pave the way for mortgage rates to come down too. But that doesn’t mean they’ll fall immediately. It will take some time. Remember, the Fed doesn’t determine mortgage rates. Forecasts show mortgage rates will ease more gradually over the course of the next year as long as these economic indicators continue to move in the right direction and the Fed can continue their Federal Funds rate cuts through 2025.But a change in any one of the factors mentioned here could cause a shift in the market and in the Fed’s actions in the days and months ahead. So, brace for some volatility, and for mortgage rates to respond along the way. As Ralph McLaughlin, Senior Economist at Realtor.com, notes:"The trajectory of rates over the coming months will be largely dependent on three key factors: (1) the performance of the labor market, (2) the outcome of the presidential election, and (3) any possible reemergence of inflationary pressure. While volatility has been the theme of mortgage rates over the past several months, we expect stability to reemerge towards the end of November and into early December."Bottom LineWhile the Fed’s actions play a part, economic data and market conditions are what really drive mortgage rates. As we move through the rest of 2024 and 2025, expect rates to stabilize or decline gradually, offering more certainty in what has been a volatile market. 

Expect the Unexpected: Anticipating Volatility in Today’s Housing Market

You’ve probably noticed one thing if you’re thinking about making a move: the housing market feels a bit unpredictable right now. The truth is, from home prices to mortgage rates, we’re seeing more volatility – and it’s important to understand why.At a high-level, let’s break down what’s happening and the best way to navigate it.What’s Driving Today’s Market Volatility?Factors like economic data, unemployment numbers, decisions coming out of the Federal Reserve (The Fed), and even the presidential election, are creating uncertainty right now – and uncertainty leads to market volatility.You can see that when you look at what’s happening with mortgage rates. New economic reports and other geopolitical events have an impact and can cause sudden shifts up or down, even though experts still forecast rates will come down overall. We’ve seen that effect play out recently, like when employment and inflation data get released each month.And as the markets react, these types of updates will continue to have an impact on rates moving forward. As Greg McBride, CFA, Chief Financial Analyst at Bankrate, says: “After steadily declining throughout the summer months, I expect more ups and downs to mortgage rates . . . Job market data will be closely watched as well as any clues from the Fed about the extent of upcoming interest rate cuts.”This is exactly why the projected decline in mortgage rates isn’t going to be a straight line down over the next year. As Hannah Jones, Senior Economic Research Analyst at Realtor.com, explains:“Rates have shown considerable volatility lately, and may continue to do so . . . Overall, we still expect a downward long-term mortgage rate trend.”Plus, home prices and the number of homes on the market vary dramatically depending on where you’re looking to buy or sell, which makes it even harder to get a clear picture. In some areas, home prices are rising and inventory is tight, while in others, there are more homes available and it’s leading to more moderate pricing shifts.As all of this unfolds, understanding what’s happening will help you make the right decisions, whether that’s buying or selling. And there’s one easy way to get that information: from a professional.The Importance of Partnering with a ProWhile the road ahead may have some bumps and unexpected turns, you don’t have to go it alone. A great agent will keep you up to date on the latest market developments, guide you through any shifts, and help you make smart decisions based on your goals.For example, as mortgage rates change, professionals (like your agent and a trusted lender) will explain how the shifts impact what you can reasonably plan for in your monthly payment. This will help you see how even a small change in rates can impact your bottom line – that way you don’t lose sight of the big picture even as shifts happen here and there.And since conditions can vary significantly from one neighborhood to another, your agent will also help you understand the specifics of your market—whether it’s how to navigate competition with other buyers, the number of homes available, or what’s happening with local home prices. Their insights and expertise will help you adapt to any movement in the market.Bottom LineThe housing market may be experiencing some shifts, but don’t let it stop you from making your move. With the support of an experienced real estate agent and a trusted lender, you’ll be ready to navigate the changes and make the most of the opportunities that come your way.

Home Buying, Moving, Launching a New Business All at Once - Yes, You Can!

Home Buying, Moving, Launching a New Business All at Once - Yes, You Can! Do you ever find yourself feeling that the space in your home is too small for all of your needs? Do you want to start a home-based business but feel like there's no room left for you to work in? If this sounds familiar, Bianchi Realty & Property Management can help you find your dream home where you and your new business can thrive. Choose the right location Do some research on zoning laws to make sure you're not breaking any ordinances with your new office space. This is especially important if your business could potentially cause disturbances to the neighbors, such as high traffic from deliveries or visitors, potential noise levels from machinery, etc. Review your proximity needs. Working from home can give you the flexibility to find much more affordable neighborhoods in Pinellas County. What do you genuinely need to be close to for your business and personal needs? This might include good school districts, parks, suppliers, or transport hubs. Make a list of areas that fit your criteria, and review their average home prices and availability to compare. You can also work with your Bianchi Realty agent to help you in your search and save you some time. Buying your new home Moving house at the same time you start a business requires a lot of investment. So make sure you have gone through all the numbers and consult a financial advisor if needed, so you're clear on your budget, payment schedules, and rainy day or contingency funds. Although you're just starting your business venture, aim to buy a home that will allow your company to grow. This way, you avoid having to move in a couple of years because you've outgrown your office space again. Review all the paperwork carefully. When it comes to property investments, the key is often in the small print! And be sure to tackle other important details like determining whether to register your business as a Florida LLC or sole proprietorship. Budget for your ongoing maintenance costs. The costs of running a home in a new area could vary significantly with changing utility prices, especially now that you're running a home office too. So make sure you don't get any nasty surprises. Set up your home office. Make it comfortable. After all, you will be spending a large part of your day in your office, especially at the beginning. Take care of the ergonomics, and your back will thank you. Separate your office space from your living space. In the first months of your business, you will inevitably tend to overwork, so having clear boundaries between the two areas will help you maintain a balance with your personal life. Make sure you have enough storage space. If you're generating a lot of paperwork, or need to have inventory on hand, make sure that everything has its place so you don't end up with a lot of clutter eating away your productivity. Light up the room. Make sure that you set up an office space that has plenty of natural light. You can complement it with plenty of standing or ceiling lamps for when the sunlight isn't enough, but natural light is more conducive to productivity and better for your eyes. We hope these insights were helpful. Are you ready to get the ball rolling? Get in touch with Bianchi Realty & Property Management at 727-595 SOLD. We wish you the best of luck on this new chapter, fulfilling your entrepreneur and homeownership dreams! Image via Pexels     Article by: Charlotte Meier