As we move further into October, the latest economic news offers critical insights for homebuyers and sellers. Staying informed on inflation, stock markets, and mortgage rates can help you make well-timed decisions in this evolving real estate market. Let’s break down what this week’s data means for you.

Inflation Update: Cooling but Still Present

This week, two critical inflation reports were released: the Consumer Price Index (CPI) and the Producer Price Index (PPI). The CPI, a broad measure of consumer inflation, showed a 2.4% year-over-year increase for September, down slightly from August’s 2.5% rise. This marks the smallest annual increase since February 2021. The PPI, which tracks producers’ prices for goods and services, showed a 1.8% rise over the past year.

For homebuyers, this slower inflation growth is a positive sign. It suggests that the economy isn’t overheating, which could help stabilize borrowing costs in the future. While mortgage rates have been climbing, the cooling inflation data may help ease further rate hikes.

For home sellers, inflation impacts consumer spending power. If prices continue to stabilize, buyers may feel more confident about making large purchases like homes, which can boost demand for your listing.

Jobs Market and Its Impact on Inflation

Last week’s jobs report showed 254,000 new jobs were added in September, with wages increasing by more than 4% year-over-year. While job growth is good news, more people working and higher wages can lead to higher consumer spending, which could reignite inflation.

For now, inflation remains under control, but buyers and sellers should monitor future job reports closely. If the labor market continues to tighten, inflation may rise again, which could lead to further increases in mortgage rates.

Mortgage Rates: Still Rising

Mortgage rates remain a key factor for anyone planning to buy or sell a home. As of October 10, 2024, the average 30-year fixed mortgage rate reached 6.32%, up from 6.12% the previous week. The 15-year fixed rate also climbed to 5.41%, up from 5.25%.

For homebuyers, these higher rates mean larger monthly payments. If you’re considering buying a home, locking in a rate sooner rather than later might save you money as rates fluctuate. For home sellers, keep in mind that rising rates can limit buyer affordability, so pricing your home competitively will be crucial.

Stock Markets and Bond Yields

The stock market had an intense week, with the Dow, S&P 500, and Nasdaq all posting gains as investors reacted positively to the cooling inflation news. However, bond yields rose after the September jobs report, with the 10-year Treasury yield closing at 4.08% and the 30-year yield at 4.39%. Mortgage rates often track bond yields, so this rise contributed to the recent increase in mortgage rates.

What Does This Mean for You?

The current economic environment offers both challenges and opportunities for homebuyers and sellers. Although inflation appears to be cooling, mortgage rates are still rising due to strong job growth. As you navigate the market, it is important to stay informed and make strategic decisions.