Upcoming Events

AZ FESTIVAL OF NATIONS

February 8-9
Mark Coronado Park
FREE

Heart & Sole 5K & 1 Mile

Saturday, February 8, from 8:00 - 12:00 PM
Goodyear Ballpark
$5 - $10

Vision & Sound 

Saturday, February 15, from 5:00 - 8:00 PM
Goodyear Civic Square
FREE

AOPA Fly-In

Saturday, February 14-16, from 8:00 AM - 5:00 PM
Buckeye Municipal Airport

Local Market Update

The real estate market is currently showing a healthy balance between supply and demand, with a Months Supply of Inventory at 5.04. This metric indicates that it would take approximately 5 months to sell all the homes currently on the market at the current sales pace.

The 12-Month Change in Months of Inventory has seen a significant increase of +55.56%, suggesting that there has been an increase in the number of homes available for sale compared to the previous year. This could potentially provide buyers with more options to choose from.

The Median Days Homes are On the Market is 43, indicating that homes are selling relatively quickly in this market. This could be attributed to the List to Sold Price Percentage of 99.3%, showing that homes are typically selling close to their listing price.

With a Median Sold Price of $361,295, sellers can expect to receive a competitive price for their homes in this market. Buyers may find that there is a good selection of homes available at a reasonable price point.

Overall, these metrics indicate a balanced and active real estate market, offering opportunities for both buyers and sellers. Buyers can benefit from a good selection of homes to choose from, while sellers can expect to receive competitive offers for their properties.

Real Estate Headlines

Why Mortgage Rates Don’t Always Follow The Fed Rate

While many homeowners expect Federal Reserve rate cuts to automatically lead to lower mortgage rates, the relationship is more complex, particularly when considering Treasury bonds, employment data, and inflation.

The Treasury Bond Connection

Mortgage rates are primarily influenced by the 10-year Treasury yield, which doesn't always move in sync with Fed decisions:

• Treasury yields respond to long-term economic outlook rather than short-term Fed rates

• Global investors may drive Treasury yields higher if they anticipate strong economic growth or inflation risks

• The spread between mortgage rates and Treasury yields can widen based on market risk assessment

When Treasury yields rise due to economic optimism or inflation concerns, mortgage rates typically follow, regardless of Fed actions.

The Jobs-Mortgage Rate Connection

Strong employment numbers can push mortgage rates higher, even during Fed rate cuts. Here's why:

• Robust job growth typically leads to increased consumer spending and housing demand

• Higher employment rates often result in wage growth, which can fuel inflation concerns

• Lenders may maintain higher rates to manage increased loan demand from employed buyers

For example, if monthly jobs reports consistently exceed expectations, investors might anticipate stronger economic growth, leading to higher mortgage rates despite Fed cuts.

Inflation's Critical Role

Inflation significantly influences both Treasury yields and mortgage rates:

• Lenders must set rates high enough above inflation to ensure real returns over the loan's lifetime

• Even modest inflation increases can cause investors to demand higher yields on both Treasuries and mortgage-backed securities

• If inflation remains elevated despite Fed rate cuts, mortgage rates may stay high to compensate for inflation risk

Consider this scenario: The Fed cuts rates by 0.25%, but if inflation data shows persistent 4% annual price increases, both Treasury yields and mortgage rates might rise as investors seek inflation protection.

The Complete Picture

Understanding mortgage rates requires monitoring multiple factors:

• 10-year Treasury yield movements as the primary benchmark

• Employment data indicating economic strength

• Inflation trends affecting long-term lending risks

• The spread between Treasury yields and mortgage rates

Homebuyers should watch these interconnected factors, not just Fed announcements, when planning their mortgage strategies. Strong economic data or inflation concerns can drive both Treasury yields and mortgage rates higher, even in a Fed rate-cutting environment.

Household Tip

Household Action Items

As we approach the warmer months in Phoenix, February presents the perfect opportunity to prepare your home for the upcoming seasonal changes. Here are three key areas to focus on this month:

Pool Preparation

Now is the crucial time to get your pool ready for the swimming season. Start by thoroughly inspecting all pool equipment, including pumps, filters, and heating systems. Clean or replace filter cartridges, check chemical levels, and ensure proper water circulation. Regular maintenance now will help prevent costly repairs during peak swimming months.

Weed Prevention

February is the optimal time for applying pre-emergent herbicides to your yard. This proactive approach prevents summer weeds before they start growing, saving you time and effort in the warmer months. Focus on areas where weeds typically appear, including garden beds, gravel areas, and lawn perimeters.

Pest Control Planning

With spring approaching, insects will soon become more active. Schedule a comprehensive pest control service now to create a protective barrier around your home. Focus on common entry points and potential problem areas. Professional treatment during this time can significantly reduce pest issues throughout the warmer months.

Taking action on these items now will help ensure a smoother transition into spring and summer, while potentially saving both time and money on maintenance and repairs later in the year.