Well, this was a perfect article for today.
Will home prices drop will mortgage rates rise, what to
expect in the fall housing market?
So that's gonna be our agenda today, us pivoting around
what the Federal Reserve does.
So this week, as you guys know, if you follow my channel, the Federal
Reserve is meeting today and tomorrow, then tomorrow at two o'clock, I'm
gonna have to change my live event because it was two o'clock Eastern.
So I gotta change my live for tomorrow.
So it's gonna be one o'clock Central Time.
That's what I am.
So we're gonna go live to watch what the Federal Reserve does.
So join us then.
But what we wanna focus in on is this housing, mortgage
rates, inflation, and so forth.
So what we wanna do is go over to the headline numbers we see right here this
caption rate here is telling us what the Wall street actually is doing or
what they're expecting from the Fed.
So now let's see what they're saying.
The Fed is now expected to keep rising rates, then hold them.
I'm still contrarian to that.
CNBC survey says, so let's get into these details.
Here's where the Central Banks want, or Wall street expense expects the Central
Banks to be by the end of this year.
And next year, their forecasts are terrible.
You can check out a video, I'll try to find it.
And if I do, it'll be right up here.
I did a video a couple years ago saying, Hey guys, the Federal
Reserve came out and said, they're not gonna raise rates until 2023.
That was in 2021.
And then 2022, we've seen four rate hikes now.
That doesn't make much sense, but here's what they're saying.
Wall street thinks that the Federal Reserve is gonna raise
rates all the way to 4.26.
And I'm gonna show you how that number reflects here in a minute.
The growing concern though is right here.
Like I've been saying for the last months and months.
I think they're gonna overdo it.
And now a lot of Wall street analysts are thinking the same thing.
They're gonna push us into a recession.
So let's get to where Wall street expects the federal funds rate.
And we're gonna just focus in on that right now.
If you have questions on a federal funds rate, leave some comments down below.
I'd love to explain that for you, but here's where the federal funds rate
here's where they expect it to go.
And then what we're gonna do is look at how we're gonna get there.
So right now we're at 2.4, we're expected by December to be at 3.9.
So that means we're gonna go up a one and a.
Percent.
So that means the federal Reserve's gonna raise rates one and a half
percent from now to the end of the year.
In the next meeting, we pretty much know, and I'm expecting this and I'll
be completely, it'll be a curve ball to me if they come out any different,
but I'm expecting the next meeting to come out at 75 base points increase.
So the Federal Reserve's gonna increase rates by three quarters of a percent.
So then how do we get to this 3.9 number?
There's 75% or 75 base points left.
Or three quarters of a percent of rate increases left.
So my expectations, I forgot to tell you guys this yesterday at the end of
my video, here's what I'm expecting to see in the next three fed meetings.
So they're gonna meet in September.
They're gonna meet in November and December.
So in this meeting, they're gonna raise rates three-quarters of a percent.
That's gonna bring us up right below the 3.9%.
We're gonna be 75 base
from there as they just stated.
So sorry for repeating myself.
So in my expectations for November, they're gonna raise rates 50
basis points or a half a percent.
Then in December, they're gonna raise rates a quarter percent that could
change based on the inflation numbers.
But I don't think it's going to, they're gonna stay on this path
because they gotta build credibility.
That'll take us to the 3.9 rate.
So that's my expectations for the coming.
So let's see what wall street has to say about a lot of this stuff.
We're continuing to see the market crash, again and again, look Dow
Jones is down 300 basis points.
Why Federal due two-day policy meaning begins and the expense rates to surge.
Okay.
So that's the part of the equation that I wanna talk to you guys about rates.
So now a part of this is what's gonna go on with housing from there.
Let's start looking at this piece of the puzzle.
So we know the demand, because interest rates are going up and
up are starting to slow down and slow down dramatically actually.
But now we see now let's check out the supply equation of this.
So when you read it at first, August housing starts
record number of housing units under construction.
Like I always say, don't judge a book by its cover.
So what we want to do is dive into this data.
Hold on a second.
I'm an old fella, as you guys know. Privately owned housing starts
in August were at a seasonally adjusted rate of 1.57, 5 million.
This is a 12% above the revised numbers in July, but 0.1 below the August numbers.
So it says there's a record number of
houses under construction.
Then we go to this piece of the puzzle and we see I'm gonna try to roll it
up so I can get my head outta the way privately owned housing units authorized
by building permits in August or at a seasonally adjusted annual rate of 1.517.
This is 10% below the revised July.
Number of one point.
Five and is 14% below the August 2021 numbers.
So we aren't at a record number of new home construction.
These can these, I get where you guys watch these or go to these websites
and the data's just confusing.
That's why you need to join into my channel.
So I can show you guys the facts behind all this stuff.
So the next piece of this puzzle, let's see this is the number of
housing starts look where housing starts for those that are saying,
we don't have a housing shortage.
Look at this let's just blend this together.
Let's just say, okay let's look at it this way.
You go over here and here's the number of two units starts.
Okay. We're right here.
We were higher than that in 2020.
Okay.
So it's not a record number there.
The next piece of this puzzle is here's one unit structures.
We're right here.
Do you see a record number?
No, I see a record number here, so we don't have the record-breaking numbers
of new homes coming to the market.
Okay.
So that's now let's piece this all together.
What we got is
the demand will demand starting to really taper off because
of rates and affordability.
Then we have starting home starts or permits.
Those are actually coming down as we're seeing here.
So if we have less homes and more demand, that's gonna have prices coming down.
So again, guys, I'm not preaching FOMO that you need to buy.
I'm not even predicting a crash because I think we're gonna get a correction.
My idea of this correction is about a 10 or 15% adjustment to house
values that just put us back to where we were six, or eight months ago.
So it's not a crash and I'm not expecting a crash.
So let's check out the economic data for today to see if there's anything
else on the agenda that we should.
or we're focused in on, we see right here building permits that we just
saw, it came in at 1.517.
That record number that they were talking about, where we previously
came off of 1.685.
So it's not a record again, don't judge a book by its cover.
So the point why you're here is you're here for mortgage rates.
So with all this data coming in, what heck is this doing for mortgage rates?
So what we do is we go over it to here.
Here's the top six products that are posted by mortgage zoos daily.
If you're buying a house, you're buying your first house, here's one of the
products you're probably gonna get qualified for 30-year fixed 15-year, the
jumbo, the 51 ARM, FHA, and VA.
You can see yesterday I predicted the 30-year fix would probably go to 6.5%.
We had a little easing in the market midday and the latter part of the day,
but it still hit a record high of 6.42.
I'll rephrase that.
Not a record high.
A record high we've seen in the last maybe 10 or 15 years.
So that's where we're at right now.
These are not my rates.
These are actually no lenders rates.
These are an average throughout the whole country.
What happens is Mortgage News Daily sends out a survey to mortgage
lenders all over the country and says, Hey, if you had a client.
Looking to buy a $500,000 house, 20% down, 740 credit scores, single
family home that they were gonna live in.
Those are my legal purposes and here's where the rates would be.
This is a national average to find out what we can do for you.
If you're in the middle of a mortgage right now, and you want to check
and see if you got the best program.
Email me, I'm gonna put my email information and all my contact
information down below in the description, email me your loan estimate.
We'll do a free review.
We'll actually scan that review to over a hundred lenders in the whole country to
ensure you guys are getting the best rate.
All you have to do, all you have really to do is send me that email.
And other than that, there's just sit back and wait for us to reply.
So what's gonna happen is we're gonna come back and say, God bless you.
You did a fantastic job.
You got the best rate out in the market, or we're gonna come back to you and
say, Hey, we can get you a better rate
and better fees.
Why not use us?
So if you wanna find out more about me and my team, all you have to
do is go to TheRateUpdate.com.
You're gonna find everything there.
And if you're you enjoy my videos, how about podcast?
So you go to your local podcast or whoever you podcast through just search Dan Frio
or The Mortgage Update with Dan Frio.
That's me check it out.
I hope you enjoyed those as much as you do my YouTube channel.
So God bless guys.
Thanks so much.
Don't forget.
I'm gonna change the live event from tomorrow at two o'clock.
I added two o'clock central.
It was supposed to be scheduled at two o'clock Eastern.
So I'm gonna revise that down to one o'clock Central, two
o'clock Eastern tomorrow.
We will go live to watch and see what the federal reserve actually does.
So thanks for watching. If you like my videos,
please.
Don't forget to give us a thumbs up.
Subscribe down below, hit the bell.
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God bless guys.
I'll see you tomorrow, actually in the morning.
And then I'll see live at 1:55 CST.
Thanks for watching.
Bye-bye.