Mortgage Rates Continue To Drop And Contracts in NYC Are Soaring

The Weekly Recap

Mortgage rates keep on going down as the latest CPI report shows inflation has hit its slowest pace in almost 2 years at 3.2%, which might be the indication the Fed has been looking for to stop rate hikes for good. UBS strategists are so bullish on rates, they believe we will see a 275 bps drop starting in March of next year while Goldman believes it to begin in Q4 of 2024. The luxury watch market has taken a hit over the past year. Housing inflation is hitting consumer sentiment harder than other prices and because congress is the bastion of American confidence, a US senator challenged the head of the Teamsters to a fight on the senate floor.

Mortgage Rates Continue To Drop And Contracts in NYC Are Soaring

Lot’s of good news coming out of the October reports on the CPI number as well as dropping interest rates and an increase in contracts across NYC. Homes entering contract in October jumped 24% from last month as buyers are proving to be undeterred by the elevated interest rates. In NYC, 1,858 homes entered contract which is also an 8.2% YoY increase. The resilient buyer demand has led to a record high in median prices at $1.1 million which is almost 11% higher than last year and the priciest on record since 2017.

Motivated buyers and sellers with larger budgets have been supporting the NYC sales market and as we see rates continue to fall, we will see more folks entering the market both from the buy and sell side. The shortage of homes on the market is helping sellers maintain an upper hand in negotiations but deals are getting done anywhere between 3-6% off asking price.

Buyers who have the budget and fortitude to navigate the current market can expect softer competition from other buyers. Buyers on the sidelines will start to see some relief from the pressures of rates which for the meantime means sellers having a competitive pricing strategy is increasingly important until more buyers enter the marketplace.

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding. The combination of continued economic strength, lower inflation and lower mortgage rates should bring more potential homebuyers into the market.

News You Can Use

• Wall Street Divided Over Just How Aggressive Fed Will Be in Cutting Rates Bloomberg

• Fed’s Mester Wants “Much More Evidence” That Inflation Has Been Defeated CNBC

• Fed Forecasts Are the New S&P 500 Target Yahoo Finance

• JPMorgan, Apollo Reimagine Wealth Management with Tokenization Axios

• US Rate Cuts May Not Be Seen Until Q4 2024- Goldman Sachs Yahoo Finance

• While All Inflation is Bad, Housing Inflation Feels the Worst Wall Street Journal

• Why the Golden Age of Remote Work Might Be Coming to an End CNBC

• Can US Stock Dodge a Bear Market Next Year? Wall Street Journal

• Moody’s Warning on the Massive US Debt Burden Has Turned Into a Nonevent CNBC

• GOP Sen. Mullin Challenges Teamsters Boss to Fight at Senate Hearing CNBC

The Deep Insight

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