Good Tuesday AM from your hometown lender,

A little bit of data today which was stronger than expected with the NFIB (small business optimism) jumping more than expected. Markets are largely ignoring and are trading within the current channel waiting for tomorrow’s CPI report. It is a big report and one the Fed will digest before next week’s Fed meeting. Markets are expecting CPI to come in +.3%. It seems like a reasonable number. If it comes in lower, we could/should see some buying in bonds which will push rates lower. If it comes in above .3% well, rates will deteriorate. It is never a good idea to float into a big news event. 

Some encouraging news from Fannie Mae.

The latest Fannie Mae Home Purchase Sentiment Index (HPSI) increased 0.4 points in November to 75.0, continuing its sharp upward trend over the past year, as consumers appear to be acclimating to higher mortgage rates in today’s home price environment.

In November, a new record-high share of consumers indicated that they expect mortgage rates to decline over the next 12 months, while fewer respondents said they expect home prices to rise. While only 23% believe it’s a “Good Time to Buy a Home,” on net that component continued its upward trend, and is now notably higher than last November’s share of 14%. The share of respondents saying it’s a “Good Time to Sell” remained flat month-over-month, but is also up from last year. Year over year, the HPSI is up 10.7 points.

Fannie Mae’s HPSI found:

• Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 20% to 23%, while the percentage who say it is a bad time to buy decreased from 80% to 77%. As a result, the net share of those who say it is a good time to buy increased six percentage points month over month to negative 54%.
• Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it’s a bad time to sell also remained unchanged at 35%. As a result, the net share of those who say it is a good time to sell remained unchanged month-over-month at 29%.
• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 39% to 38%, while the percentage who say home prices will go down increased from 23% to 25%. The share who think home prices will stay the same decreased from 38% to 36%. As a result, the net share of those who say home prices will go up in the next 12 months decreased five percentage points month-over-month to 12%.
• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 39% to 45%, while the percentage who expect mortgage rates to go up increased from 22% to 25%. The share who think mortgage rates will stay the same decreased from 38% to 29%. As a result, the net share of those who say mortgage rates will go down over the next 12 months increased four percentage points month-over-month to 20%.
• Job Loss Concern: The percentage of employed respondents who say they are not concerned about losing their job in the next 12 months decreased from 79% to 78%, while the percentage who say they are concerned remained unchanged at 20%. As a result, the net share of those who say they are not concerned about losing their job remained unchanged month-over-month at 58%.
• Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 18% to 16%, while the percentage who say their household income is significantly lower increased from 11% to 12%. The percentage who say their household income is about the same increased from 70% to 71%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased one percentage point month-over-month to 5%.

It is time to create a plan for 2025 as the opportunity is peaking its head out.

Stay safe and make today great!!!