It is Wednesday, January 28th. The Federal Reserve wraps up its two-day meeting today, with a statement due at 2:00 PM ET. While the media focuses on the immediate “noise” of the press conference, I want to focus on the “signal” coming from the latest economic data.
Home Prices Are resilient We have been discussing the thesis that lower rates increase demand, and that increased demand supports home prices. The data released yesterday proves this thesis is playing out in real-time.
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Case-Shiller: The “gold standard” for appreciation showed home prices rose 0.4% in November. This is the fourth consecutive month of gains on a seasonally adjusted basis.
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FHFA: This report, which covers single-family homes with conforming loan amounts, was even stronger, showing a 0.6% rise.
Year-over-year, prices are up between 1.4% and 1.9%. The bottom line for buyers in Magnolia and beyond is simple: If you wait for rates to drop further, you will likely pay more for the home itself.
Labor Market Softening The ADP weekly employment report shows private employers added an average of only 7,750 jobs per week recently. This suggests a potentially weak monthly report of around 30,000 job gains. Why does this matter? The Fed acts on weakness. If the labor market softens, it gives the Fed more reason to cut rates, which brings us back to the point above: lower rates = higher demand.
Technical Analysis Mortgage bonds are holding their ground, riding the 25-day Moving Average. The 10-year Treasury yield successfully tested resistance, which is a good technical sign for rate stability.
The Opportunity Builders have pulled back. Supply is not coming online quickly enough to meet the demand that lower rates will create in 2026. My advice is to act before the competition heats up. You can be the one gaining that appreciation, or the one paying it.
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Sal Trapani, Mortgage Banker & Owner, MJ Mortgage LLC, 281-608-2846 cell, sal@mjmortgagellc.com, www.mjmortgagellc.com, Magnolia, TX 77354, NMLS 1055510 / NMLS 2381195