Joseph Murphy on LinkedIn: Housing Market Forecast for 2024 Elevated mortgage rates, out-of-reach… (2024)

It was a weird, windy, purpley pink morning with a little of the devil’s own cauldron thrown in for good measure. The sky was a gigantic mural held in place by a thumb nail moon. “Purple haze all in my brainLately, things just don't seem the sameActin' funny but I don't know why'Scuse me while I kiss the sky“- Jimi Hendrix

1

An Apple a Day Keeps the Storm Clouds AwayThe market catapulted over 500 big one out of the gates this morningon the strength of Apple’s earnings, slowing job growth, and rising unemployment.Apple’s iPhone sales were off but increased share buy backs and margins increasing inducted investors to take a second bite, so to speak, at what they hope is the market’s return to its winning ways.Don’t know if Apple’s apples are organic but “Apple’s gross margin expanded to 46.6%, continuing an upward trajectory that reflects the company’s growing services business, which brings with it stout profits.” - CNBC. All of the aforementioned putting back in play a rate cut “sometime” this year. “Investors will interpret today’s weak jobs report as a sign that demand is slowing in the labor market,” said Richard Flynn at Charles Schwab UK. “A dive in the labor market may be what it takes to push the Fed from a stroll to a sprint.”Down the Shore the morning like the market paid homage to the late. Great Jimi Hendrix’s Purple Haze “Scuse me while I kiss the sky.”Alexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

6

Texas Hold ‘EmThe markets highly volatile response to the Fed’s nudge nudge wink wink implication that it will not raise was both predictable and a head scratcher.The Fed’s Data Dependent approach is beginning to feel like an extended game of Texas Hold “Em.The two hole cards, (the illusive 2%) have been dealt.“The Flop" cards, initial jobless claims, factory orders, and April non-farm payrolls will be dealt today and tomorrow. "The turn" card Apple Earnings will be dealt after today’smarket close. The final or "The river" card will manifest itself in the market’s reaction to all of the above.Over the past few days the betting has been ferocious with 500 hundred point moves whipsawing around the table. “The player who has the best hand and has not folded by the end of all betting rounds wins all of the money bet for the hand’.The objective of winning players is not to win every individual hand, but rather to win over the longer term by making mathematically and psychologically better decisions regarding when and how much to bet, raise, call or fold. Winning poker players work to enhance their opponents' betting and maximize their own expected gain on each round of betting, to thereby increase their long-term winnings.’- WikipediaStock futures are anteing up this morning after the jobless claims release.Down the Shore the outlook continues to be murky. We find ourselves in a little bit of an etherizedstate because of“The yellow fog that rubs its back upon the window-panes.’). T.S. Eliot. Make it a great day.Alexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

2

Federal Reserve holds rates steady. Here's what that means for your money.Federal Reserve officials said they are leaving their benchmark rate untouched, noting that progress in taming U.S. inflation has stalled. What does the rate decision mean for your money?Expect to continue to pay high rates to borrow money, noted Jacob Channel, senior economist at LendingTree.Mortgage rates are likely to remain above 7%, at least in the near term, he added. Credit card rates, which are at recordhighs, are sure to remain elevated, he noted. "Across the board, it's all expensive," Channel said. "The interest rate on a credit card will make the interest rate on a mortgage look minuscule by comparison."On the bright side, savers are likely to continue to find higher-interest savings accounts, with some offering yields above 5%, according to Ken Tumin, banking expert at DepositAccounts.com. Certificates of deposit and other savings vehicles can also offer robust rates.- CBS News

When Ducks Are Not in LineGround's Control to Major TomYour circuit's dead, there's something wrongDavid BowieThe Fed looks like it has finally gotten its ducks in line policy wise, but, unfortunately, inflation is having none of it.For some time now the Fed has been in a holding pattern waiting for clearance to land (ease) and it appears that that is not like to change this afternoon.Traders, who were slow on the uptake about what the Fed has been laying down, are now looking for some direction — a direction they are not going to be happy with — higher for longer.Stock futures are losing altitude premarket, AI appears to be in a bit of a tail spin, and oil ain’t exactly straightening up and flying right. There is also a crap ton (doesn’t sound as offensive somehow or other) of economic releases in the wings, job openings and manufacturing data being at the head of the pack. Down the Shore, the morning got off to a sluggish start. The sun decided, I’ve had enough of this, I’m pulling the covers over my head and staying where I am.Unfortunately, traders do not have that luxury in what could be a pretty hectic day. Make it a great one.Alexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

3

How mortgage rates have impacted the spring housing market “The biggest thing when we’re looking at mortgage rates right now is volatility,” said Nicole Bachaud, a senior economist at Zillow Group. While some buyers have come to terms with 7% interest rates, the volatility of rates is “really the thing that’s going to impact the [housing] market the most,” Bachaud said. When rates bounce around from week to week, a buyer looking into a house one day might not be able to afford the same property the next day, she said. For example, a homebuyer hoping to secure a $400,000, 30-year fixed-rate mortgage might have gotten a rate of about 6.82% in early April, according to Freddie Mac and Fed data. That works out to a monthly mortgage payment of around $2,613. Two weeks later, rates were hovering at 7.10%. That slightly higher rate adds $75 to the monthly mortgage payment, or $27,000 over the life of the loan. - CNBCAlexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

4

A Hair of the Dog — Or a Tequila Sunrise?Futures woke up a little on the fuzzy side this morning following some pretty serious partying of late.Conventional (party hearty) wisdom would be have a hair of the dog to steady yournervesand carry on.Meanwhile, Wall Street wisdom is tsk tsking and reminding us of Mega cap earnings, Fed Speak, and escalating geopolitical unrest screwing with oil prices. Hold on to your hats and make mine a “Bloody.”Make it a great day. And I'm a victim of life's circ*mstancesWell I was raised around bar rooms andFriday nightdancesSingin' them old country songsAnd half the time ending up some place I don't belongDelbert McLintonAlexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

4

1 Comment

Social Security isn’t keeping up with inflation. Not long ago, senior citizens got thetwo biggest annual increasesin their monthly Social Security checks that most had ever seen. But for many of them, the adjustments still weren’t enough to cope with the runaway inflation of earlier this decade and thecontinued high pricesfor food, housing, utilities and other necessities.Inflation has eaten away at 36% ofSocial Security benefits’ buying powersince 2000, according to an analysis last year from The Senior Citizens League. Those who retired before 2000 would need a nearly $517 boost in their monthly benefits just to maintain the same level of purchasing power as in 2000.A spate of decades-high inflation, which peaked in mid-2022, led to annual cost-of-livingadjustments of5.9% for 2022and8.7% for 2023, the largest since the early 1980s. For this year, however, retirees are only receivingan increase of 3.2%because inflation has moderated.Household costs rose more than the benefit bump. Food is a particular pressure point – groceries are nearly 33% more expensive than they were in January 2021. This shortfall is forcing more seniorsto turn to other sources of funds, such as savings or credit cards, and to assistance programs to help with rent, utilities, real estate taxes and health care costs.- CNN

4

Apple — Does one bad one (qtr) ruin the whole cart?It’s Monday morning and pre market stock futures are moving pretty good.And why not, Tesla is up 12% premarket on good new out of Elon Musk’s trip to China, hopefully a harbinger of things to come out of big tech earnings this week.Apple and Amazon report later in the week and all eyes, investors and the Fed’s, will be focused on that.There are a number of predictions that Apple could turn in a “bad apple” report this week.Hey, we traded forbidden fruit for free will — be careful what you wish for. The Fed is not expected to deviatefrom its steady as she goes course based on the lack of progress (you could drive a truck through that statement) to rein in inflation and continued strength in the labor market. Down the Shore, similar to the market, it was a foggy, shadow and substance morning.The mist made it difficult to figure out what was real and what imagined, but those who know, know — this mist will burn off and let the sun shine in. Make it a great day.Alexandra Esquivel-Murphy Joseph Esquivel-Murphy Don Ullmann

2