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  • Writer's pictureZachary Epps

BIG Week Ahead!

Rates ticked up slightly this week. It was a relatively quiet week but we’ve got a real busy one on the horizon. Let's get into it!

Starting with housing, we received CoreLogic’s appreciation data for October. It has national appreciation at up 10.1% year over year. And while this is a decline from up 11.4% year over year it’s still quite significant. More interesting to me is that CoreLogic is forecasting no appreciation in November but 4.1% in the year going forward. This is actually an increase from 3.9% that they were expecting in the previous report. So this “demand slump” that we’re in is not forecasted to be around very long and I should note that even 4% appreciation is significant for homeowners. If someone buys a $500,000 house with 5% down they will spend about $32,000 ($25,000 down + ~$3,000 in Closing Costs and ~$4,000 in Pre-Paids). Fast forward a year and that house is now worth $520,000. That homeowner will have made $20,000 on their original investment of $32,000 or a 62.5% return. Now this is simplified obviously as there’s selling costs associated but we’re also looking at only 1 year and how many folks sell after just 1 year? Even tame appreciation is significant when you account for the power of leverage.

Today we received wholesale inflation (inflation of raw goods and materials) and this decreased to 7.4% year over year. The core rate which removes food and energy from the equation decreased from 6.7% to 6.2%. Within the inflation report, used cars are showing more signs of declining prices. Wholesale used car prices are down 14.2% from last year. Vehicles were one of the hardest hit assets when inflation was ticking up so had a huge impact on inflation. They will have an equally significant effect on inflation cooling.

Next week is a busy one as we have the final Fed meeting of the year wrapping up on Wednesday. Here’s the hikes they’ve made so far in 2022:

March 17th | +.25%

May 5th | +.50%

June 16th | +.75%

July 27th | +.75%

Sept 21st | +.75%

Nov 2nd | +.75%

It’s widely anticipated that the Fed will hike rates another .5% on Wednesday. More important than the hike itself will be the press conference after it. I’ve talked about a battle being fought within the Fed between the doves, who favor a more patient and accommodative approach and the hawks, who favor a more aggressive approach. Investors will be dissecting the press conference for any hints as to who is winning that battle. Next week we’ll also be getting the Consumer Price Index for November. Due to replacing warmer inflation figures from a year ago we should continue to see inflation cool. This report will be released on Tuesday, so it’ll be available to the Fed as they are having their meeting. As inflation comes down, mortgage rates will follow suit.

Thinking about moving? Call or text me today! 303-520-0070

I’d seriously enjoy having the opportunity to talk to you about your plans if you’re moving, or if you know someone who is considering a move, and needs some straight answers.

Also, I’m never too busy for your referrals. As a real estate professional intent on giving back to the community, my relationship-based approach is exactly what you’ve been looking for in a helpful RE/MAX Professional.

Zachary Epps


RE/MAX Hall of Fame, RE/MAX Platinum Club

Thanks to Aaron Staufer at Elevations Credit Union for this information!

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