Mortgages still sideways with election outcome in the balance
It’s been nearly 24 hours since the first polls closed and control of both sides of Congress are still up for grabs. While the GOP will likely take control of the House of Representatives, the results of the mid-term elections are from the red wave most pollsters had predicted. In the Senate, close races in Nevada, Arizona, and Georgia are still too close to call. Georgia is heading to another runoff which could decide it all.
President Biden is expected to break his silence on the results of the midterm elections and provide insight how the administration will move forward during the second half of his term. On the GOP-side, you have to wonder if the party is beginning to pivot to new leadership after the underwhelming midterm results.
As for the markets, stocks closed sharply lower today as the bullish momentum leading up to the midterm elections has subsided. The bond market, on the other hand, seems to be laser-focused on tomorrow’s CPI report, where markets are anxiously awaiting signs that inflation is moving lower. A weaker than expected reading will likely push the Fed to slow the pace and scale of future rate hikes. MBS are closing the day slightly lower.
Is an economic recession avoidable?
Wharton professor Jeremy Siegel spoke with Business Insider, and claims that it is possible for the U.S. economy to avoid a recession. According to Siegel, the Fed needs to pivot away from raising rates to lowering them by the summer to keep the U.S. out of a recession. He also stated that he sees inflation relief on the horizon as shipping costs have lowered, asset prices are down, and recent layoffs have occurred.
Is the housing market moving into a ‘buyer’s market’?
According to Realtor.com, home buyers may have more power than they think in the current market. Home prices are dropping as more buyers stay on the sidelines given the current higher rate environment. Home showings are slowing and the homes that are on the market are taking longer to sell, and falling prices means that some of the pain of a higher rate is offset.
There are also other options, like mortgage rate buydowns, that can provide further advantages to home buyers in the current market.
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