A Look Into The Markets: August 2024

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August 13, 2024

A Look Into The Markets: August 2024

"A house is made of walls and beams; a home is built with love and dreams." - Unknown

Whether you're buying, selling, or exploring alternative investments such as foreclosed homes, staying informed is the key to making smart decisions in today's hot housing market. In this issue, we explore these topics, along with the following:

What to Watch: Could a Fed Rate Cut be headed our way? All eyes will be waiting to see if the Federal Reserve will lower interest rates at the September Federal Open Market Committee meeting.

Housing: Navigating the current real estate market requires a keen understanding of market dynamics. Discover expert tips to maximize your home's value and handle bidding wars.

Home improvement: Transform your home with these ingenious storage solutions designed to maximize every inch of space.

Q&A: Learn about the pros and cons of buying foreclosed homes. From potential savings to hidden risks, our Q&A reveals all you need to know before making this investment.

What to Watch

Eyes On The Fed

All eyes will be waiting to see if the Federal Reserve will lower interest rates at the September Federal Open Market Committee meeting. Slowing inflation pressures and easing economic growth data could be the catalysts that push the Fed to cut the Fed Funds Rate (FFR). The Fed Funds Rate is the interest rate banks charge each other to borrow or lend excess reserves overnight. This rate impacts interest rates on everyday consumer products, such as credit cards, auto loans, student loans, and the like.

Currently, there is a 100% chance of a rate cut in September, as evidenced by Fed Fund Futures trading. "At the moment, a modest cut of 25 basis points in September seems likely. If that goes well, we could see two additional 25 basis point cuts before 2024 ends. Cuts are far from guaranteed however, remember the Fed is designed to pivot quickly should something unexpected happened said Jacob Channel, Chief Economist at LendingTree.

Cuts are not guaranteed and Fed officials will continue to monitor economic data as it is released.

The Fed has a dual mandate of keeping inflation in check and obtaining maximum employment. Job growth has averaged a decent (but not great) 177,000 jobs added per month for the past three months, down from the three-month average of 275,000 a year ago. Inflation, as measured by the Consumer Price Index, has fallen below 3% after soaring to 9% in June 2022. So, inflation is easing and job growth is slowing, which could usher in not only an interest rate cut in September but two more cuts by the end of 2024.

Bottom line: Fed rate cuts don't mean that if it cuts by a quarter point, mortgage rates will fall by a quarter. But it does have a positive impact on the bond markets and on home borrowing costs going forward.

Source: Mortgage Market Guide

Housing News

Navigating the Current Housing Market: Tips for Buyers and Sellers

Today's real estate market is characterized by high demand and limited inventory, which makes it tricky to navigate whether you're buying or selling. With a frenzy of bidding wars and soaring prices, strategic thinking and careful planning are essential. Here are some tips to help you make informed decisions:

When demand exceeds supply, sellers hold a significant advantage. Multiple offers and quick sales are common, but preparation is key to maximizing your return. Take the time to understand your local market dynamics, and price your home competitively to attract multiple offers. Consider contingencies carefully. Being flexible with closing dates or rent-back options can make your offer much more appealing. We also suggest partnering with an experienced real estate agent who is familiar with your neighborhood and can negotiate on your behalf.

Buying in a competitive market requires patience and preparation. Position yourself for success by getting pre-approved for a mortgage to demonstrate your financial readiness and strengthen your offer. Be flexible with contingencies, but know your limits to avoid overextending yourself financially. You may also want to consider alternative strategies, such as home hacking, which involves purchasing a property, residing in part of it, and renting out other areas to offset mortgage costs or generate income. Another option is to explore less competitive neighborhoods in the surrounding area.

Whether you're buying or selling, staying informed about market trends, economic indicators, and regional variations can help you make confident decisions. By strategizing effectively and leveraging expert guidance, you can navigate the current housing market successfully.

Sources: Ramseysolutions.com, Kiplinger.com, Medium.com

Home Improvement

Maximizing Small Spaces: Creative Storage Solutions for Your Home

Struggling with limited space in your home? Maximizing every inch with clever storage solutions can transform cluttered areas into organized sanctuaries. Whether you're dealing with a tiny entryway or a compact bathroom, strategic storage ideas can make a big difference.

Entryways made efficient: Entryways often lack adequate storage for coats, shoes, and daily essentials. Transform your entry into a functional drop zone by installing hooks and open shelves. Customize these with bins or baskets to sort items by family member or category, keeping everything organized and easily accessible.

Hidden storage gems: Not all items belong in plain sight. Utilize hidden storage solutions to maintain a neat, streamlined look. Consider furniture pieces such as flip-top upholstered storage benches that stylishly conceal items you'd prefer not to display.

Narrow spaces, big Impact: In tight hallways or compact kitchens, small-scale additions can yield significant storage dividends. Opt for narrow shelves or notched-back designs that offer just enough room for essentials such as spices or toiletries.

Vertical versatility: When floor space is at a premium, look up. Vertical storage solutions, such as tall shelves or behind-the-door organizers, can effectively utilize unused wall space. Slim wire baskets or slim shelving units on doors can corral cleaning supplies or office essentials, keeping them within easy reach.

Multifunctional furniture: Furniture that serves dual purposes is a game-changer in small spaces. Look for pieces such as ladder-style shelving units that offer storage at various heights. These not only provide ample room for books or dÃ©cor but also visually open up the room, making it feel larger and more inviting.

Strategic storage mix: Mix and match your storage options to suit different needs. Cabinets, drawers, and open shelves each have their place use cabinets for hiding clutter, drawers for organizing smaller items, and open shelves for displaying decorative pieces or frequently used kitchenware.

Every inch counts: In bedrooms or living areas without closets, portable storage systems with shelves and hanging racks can keep clothing neatly organized without monopolizing floor space. Utilize under-bed storage with risers or customized bed frames to store bulky items such as bedding or seasonal clothing.

Essentials only: Ultimately, effective small-space organization is about editing down to the essentials. Keep only what's necessary and invest in storage solutions that streamline your daily routines. By combining functionality with thoughtful design, you can create a home that feels spacious, organized, and uniquely yours.

Implementing these creative storage solutions can turn even the smallest corners of your home into efficient, clutter-free zones.

Sources: BHG.com, Apartmenttherapy.com, Architecturaldigest.com

Q&A

What Are the Pros and Cons of Buying a Foreclosed Home?

QUESTION: Should I buy a foreclosed home?

ANSWER: Buying a foreclosed home offers the potential for significant financial savings, as these properties often sell below market value. This lower pricing can provide an opportunity for both homeowners and investors to acquire real estate at a discount, potentially yielding high returns on investment through renovation and resale. Government-backed loans, such as Federal Housing Administration or Veterans Affairs loans, may also be available, making homeownership more accessible despite the property's condition.

However, purchasing a foreclosed home comes with notable risks. These properties are typically sold as-is, meaning any maintenance or repairs are the buyer's responsibility. Many foreclosed homes have been neglected, leading to potential issues such as structural damage or mold, which can escalate maintenance costs. Furthermore, the competitive nature of foreclosure auctions can drive up prices, eroding some of the expected savings. Financing can also be challenging, as cash purchases are often required, limiting options for traditional mortgages and potentially increasing financial risk if unexpected costs arise.

Before considering a foreclosed property, conduct thorough research, including property inspections and financial assessments, to fully understand the investment's potential and risks.

Source: Investopedia.com, Auction.com

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