Looking at the national economy, the Fed is ramping up to another 25 bps rate hike at their May meeting, but the job market isn’t feeling the recession burn. Unemployment sits at 3.5%, private payroll is on the rise, and 236K jobs were added in the past month. Meanwhile, interest rates remain unpredictable day to day.
More than 20,000 workers in the tech sector have lost their jobs in the past 6-8 months, and you more than likely know someone who’s been affected. According to a Mercury News report, open listings are down as much as 53% from pre-pandemic times for software positions and 37% for IT roles. But while some tech giants are downsizing, they’re still bigger than they were before COVID.
The three charts below show how real estate market cycles generally move in sync with other economic indicators such as financial markets, employment, and consumer confidence.
It’s important to note that these data points end in 2019 and don’t reflect the crazed volatility created by the global pandemic. As we’ve all seen, the housing market has experienced a complete rebound, but some economic sectors are still struggling to recover.
“Courage is not the absence of fear. It is acting in spite of it.” - Mark Twain
We often have clients who can’t seem to pull the trigger on buying a home. They may be perfectly qualified and in an excellent financial position to make the purchase. What gets in the way? Fear. Fear of losing a job, suffering a life-changing injury, or other reasons they might prevent them from paying their mortgage.
When we encounter these moments of analysis paralysis, we remind our clients that you can’t let fear of the unknown prevent you from realizing your dreams and enjoying your life.
The more debt, the more money is printed, and the greater chance of inflation. Inflation can fuel higher interest rates, which means your money won’t go as far.
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