Inflation metrics show progress
The U.S. Commerce Department released October’s PCE metrics. The month-over-month data showed inflation increased 0.2% and it was up 3.5% on the year-over-year chart. Both of these metrics came in as the market expected.
Energy prices showed the most progress with a 2.6% decrease month-over-month. Food prices remained sticky and saw a 0.2% increase.
Personal income and spending both increased 0.2%. This was seen as an indication that consumers are keeping pace with the current rate of inflation. After the news was released, the bond market sold off, but mortgage rates responded by ticking upwards 0.02% to 7.15%*. The didn’t come as a huge surprise to market watchers given the recent cool off in mortgage rates.
How many people does Nashville add per day?
Nashville has seen a flood of transplants in recent years. In fact, in 2022 the city grew by 35,624 people, roughly 100 new residents per day.
Jeff Hite, the chief economic development officer for the Nashville Chamber of Commerce, stated, “We see people moving from the same areas that we see companies having interest to relocate from — areas that are dense, expensive and highly regulated.”
While Nashville is known historically as a hub for music and entertainment, but it’s becoming known for health care, manufacturing and technology. The city has shown impressive job growth in all three sectors.
Nashville was ranked in the top 10 “homebuyer migration destinations” in a recent report.
What is the ‘magic number’ for homebuyers & sellers?
Where do mortgage rates need to be to get homebuyers and sellers back into the market? A recent article from Realtor.com explored this exact question with a few industry experts.
Mason Whitehead, a branch manager at Churchill Mortgage in Dallas, TX, said, “If we can get the rates back into the [5% range], it would be a huge motivating factor. The sting is less painful when you go from 3% to 5% and might just be enough to motivate homebuyers to start house shopping again.”
Ralph DiBugnara, president at Home Qualified and senior vice president at Cardinal Financial in New York City, stated, “The average interest has been close to over 8% in the last two quarters of 2023. A rate drop of 1% would signify to most something to take advantage of.”
DiBugnara and Whitehead were focused on what consumers are looking for, but Matt Dunbar, the vice president of the Southeast Region at Churchill mortgage in Miami, offered a prediction. Dunbar said, “We will see a gradual reduction in mortgage rates, nearing 6.5% to 6.75% by mid-2024. I’m also optimistic that, barring any major economic upheavals, we could see these rates nearing 6% to 6.25% by the end of 2024.”
* National average rates accurate as of 11/30/23 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.
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