Financial Markets- Bonds (Mortgage Rates)
The S&P 500 is knocking on the door of its all time high, and unpredictably unaffected by the skirmish in the middle east.
https://www.cnbc.com/quotes/.SPX
Meanwhile over in the bond market there appears to be winds in the sails of mortgage backed securities.
- Geopolitical uncertainty often triggers demand for mortgage backed securities, sticking with the sailing theme, these investments are considered a “safe harbor” during turbulent times
- POTUS Trump met with South Korean Prime Minister and stated that South Korea is committed to investing in US mortgage backed securities in the future, which will help push yields, and for that matter, mortgage rates, down
- Inflation appears to be around the Fed’s target. While the Fed is holding off on lowering the Fed Rate due to concerns of tariff-induced inflation, if reasonable deals are worked out it would take away any excuse for the Fed to not lower the Federal Funds Rate as much as 1%.
- At some point, the jobs report will not be taken at face value. From Elliot Eisenberg, the bow tie economist “On 3/7/25, February net employment was initially reported as 151,000, but after multiple revisions the real number is 102,000. On 4/4/25, March employment was reported as 228,000, but now we know the number is 120,000. On 5/2/25, April employment was said to be 177,000, but it’s already been revised down to 147,000, and another revision is due next month. On 6/6/25, May employment was pegged at 139,000, yeah right”
The 10 year US Treasury has dropped roughly .3% in the past 30 days, and under the formula of adding 2.5% to the 10 year US T it puts mortgage rates back below 7%.
Southern Nevada Real Estate
5 months in the books, and 2025 is falling behind the transaction pace of 2023 and 2024, the slowest years since 2009. Inventory is certainly building and the leverage has shifted in favor of buyers. But if you ask me, this dynamic quickly vanishes if rates drop .5% or more.
May Sales:
- Total: 3,212
- Condos: 350
- Townhomes: 399
- Single Family Residences: 2,448
- Inventory 9,137…this represents a 3.7-month supply (inventory from a unit perspective)
- Median-priced home $480,000
- Average priced home $590,044
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