Key Insights on Interest Rates & Market Trends1. What’s Happening with Interest Rates?No one has a crystal ball, but trends suggest a potential drop to 5.75% or even 5.5%If rates drop:Increased market activity – More buyers & sellers entering the marketHigher inventory levels – Homeowners selling due to financial pressures2. The Impact of Consumer DebtMany people are carrying significant credit card debt (25–35% interest)Refinance activity is rising as homeowners look to consolidate debtEven moving from a 3% mortgage to 6.75% can still save homeowners $600–$800/month3. Understanding Mortgage-Backed Securities (MBS) & Interest RatesCommon misconception: Fed rate cuts do not directly lower mortgage ratesTrue factor: Mortgage rates are tied to mortgage-backed securities (MBS)Key metric to watch: 10-year Treasury bond yield – It moves mortgage rates4. Government Spending & Inflation’s RoleIncreased government debt = higher bond yields = higher mortgage ratesGovernment reports on employment, inflation (CPI), and consumer data are often misleadingExample: Job reports were recently adjusted down by 818,000 jobs, revealing the economy isn’t as strong as presented5. The Role of Housing in Inflation DataHousing accounts for 46% of the Consumer Price Index (CPI)Inflation data is skewed due to outdated or incorrect rent estimates (Owner’s Equivalent Rent - OER)Actual inflation could be lower than reported, allowing for faster rate cuts6. The "Mark to Market" Gold Adjustment & Its ImpactGold is at an all-time high (~$3,000/oz) – It signals inflation concernsThe U.S. government values its gold reserves at $42/oz (from 1970s) instead of the current market rateIf the Treasury adjusts gold reserves to market value, it could add nearly $1 trillion to U.S. financesLess need to sell bonds = Lower mortgage ratesPotential drop to 5.25% or lower7. What Real Estate Agents Should Do NowMonitor Treasury announcements about “Mark to Market” for goldStay informed about CPI & Treasury yieldsPrepare for increased buyer activity if rates dropReach out to past clients – Let them know how potential rate cuts could impact their decisionsClosing ThoughtsBig takeaway: Watch for government spending cuts & Mark to Market discussionsIf rates drop, expect a hot market – be ready!Final reminder: If you list, you last!See you next week!Join our Facebook Group at: https://www.facebook.com/groups/realestateassetadvisorsVisit our website to watch replays of our Wednesday "Elevate Business Briefings" at: www.RealEstateAssetAdvisors.orgDownload a copy of my book, "If you list, you last!" at www.IfYouListYouLast.com

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