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Strong jobs numbers stoke concerns over another rate hike
Although this portends a slow decline in inflationary pressures as labor shortages persist, it also suggests that the macro economy remains resilient in the face of myriad challenges domestically and abroad.
Interest rates continue their upward climb
The strength of the U.S. economy is one of key factors driving interest rates higher in recent weeks as robust job and economic growths suggests that the Federal Reserve will be forced to make good on their commitment to keep rates “higher for longer,” which was the overarching message coming out of the last FOMC meeting.
Yield curve becoming less inverted as bond market adjusts
Although rising Treasury rates have resulted in rising mortgage rates as the bond market slowly adjusts their expectations for Fed rate cuts, it has helped the yield curve to become less inverted over the past month.
California market begins to soften amidst higher rates as winter approaches
Due to a severe lack of inventory on the market, home prices have been relatively unaffected by rising rates this year and year-over-year price growth has finally turned positive during the past few months.
Commercial real estate facing increased mortgage delinquency
Despite the residential market remaining relatively stable in the face of rising rates, remote work/hybrid working, online shopping, and the maturing of commercial mortgages are beginning to tell for office and retail sectors in particular.
The macroeconomic data suggests that the U.S. economy continues to outperform despite calls for a coming recession.
The labor markets reaccelerated in September and virtually every metric shows that the shortage of available workers persists.
this strength in the fundamental economic data has stoked fears that inflation will be slow to return to the 2% rate targeted by the Federal Reserve, which means that rates will indeed remain “higher for longer.”
SOURCE : California Association of Realtors
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