Episode 127: 2023 Real Estate Update
This week, on Inside the Skev, we sit down Jennifer LaMell Goldstone from Horwitch, Goldstone & Shaw, Deanne Cooper from Fidelity National Title Insurance and Beth Lewis from CrossCountry Mortgage. We speak about the work of attorneys, title companies and lenders, how these industries support real estate investments here locally in Chicago and the United States. We also discuss the current state of the real estate market in February 2023. This episode was also released on my global podcast, The Real Estate Diplomat.
According to Beth Lewis, she issued the following update regarding the mortgage market:
Mortgage rates jumped to their highest levels in a month this week because of last Friday’s Jobs report. Due to most of the focus being on inflation and the possible Fed rate increase, it was easy to overlook employment which is the other marker the Fed uses to gauge the strength of the economy. The most recent jobs report showed that there were more than 500k new jobs created. Pandemic years aside, this quarter typically sees a reduction in job creations and increased unemployment due to seasonal holiday jobs ending. The expectation was for 185K new jobs so 517K really blew predictions out of the water. Right now any positive economic news is bad for rates, and while the volatility is stressful we have to remember the opportunity it gives us to be advisors to our clients.
For clients concerned with the raising Fed Funds rate, remind them that this does not impact mortgage loans. The Fed rate is separate, it is the rate that banks charge other for overnight loans controlled by the Fed Reserve. Typically changes to the Fed Funds rates are reflected in advance of the actual changes and there were no changes to mortgage rates due to last week’s increase. One indicator that the economy is slowing is the unemployment report from this week. It increased new filings by 13k over December’s figures. It goes without saying that I would never want anyone to lose their job, but this is the second metric we should be paying attention to in order to see if we are heading towards a recession. A recession would bring lower rates. My opinion is that rates will hover right around where they have been for the last month until the Q1 earnings are released, and we have more data to really understand where the economy stands.
My advice to clients right now is to concentrate on the big picture. “Why do you need to buy or sell a home today and how do we get you a payment that fits your budget?” It’s impossible to time the market and we can only use the facts and tools that we have today, which are temporary buydowns and knowledge that there are many loan level price adjustments coming in April that will make home loans more expensive. We also know that rates will drop if we are in a recession and the Fed starts buying mortgage-backed securities. None of us can know when that is or what the bottom will be, but my team is here if a refi opportunity presents itself.
You can always get the latest real estate on Skokie and Evanston by going to : https://www.skevanston.com/realestatedata
To learn more about the guests, go to the following websites:
Jennifer LaMell Goldstone: https://www.hgslegal.com/
Deanne Cooper: https://www.fntic.com/ or Deanne.Cooper@fnf.com
Beth Lewis: https://crosscountrymortgage.com/Beth-Lewis-Team/Beth-Lewis/
Inside the Skev is a one stop shop for all things Skokie and Evanston hosted by Aaron Masliansky. Be the first to know about local events, new podcast episodes, real estate and the latest stories about the great people in these towns by going to http://www.skevanston.com. Sign up for the newsletter and reach out to Aaron Masliansky at aaron@skevanston.com with any questions or suggestions. Be sure to also follow Inside the Skev on Facebook, Instagram and Twitter for the latest updates. To follow The Real Estate Diplomat, go to https://www.therealestatediplomat.com/
