Offer 4.5% Rate with Your Listing! (Temporary Buydowns)
I am so glad that I joined the “record high of the month” club earlier this year because they never fail to deliver.
I liked it so much in fact that I am now joining the “record high of the week” club, as rates exploded to a new record high today in response to a far stronger than expected jobs report.
The government’s official BLS job data for September came out today showing far more new job creations than the market anticipated, and interest rates shot way up in response.
Of course, much of the new jobs were from government, leisure and hospitality, and part-time jobs (hardly signs of economic strength), and the “Household Survey” data was far less robust – but that didn’t stop the bond investors from panicking.
Investors expect today’s jobs numbers to give the Fed much more impetus to again raise rates, and we are again quoting the highest rates we have ever quoted in 23 years.
SO – I SINCERELY HOPE THAT LISTING AGENTS ARE OFFERING TEMPORARY BUYDOWNS WITH THEIR LISTINGS! A 4.5% rate offering makes a property far more enticing when fixed rates are pushing 8% or more!
I might add that we are not only buydown experts, but we are very good at helping agents market them too. Please reach out if you have questions.
Why Stocks Will Crash This Month!
The internet is abuzz with predictions of an imminent stock market crash because today’s charts parallel the charts from 1987 and 1929 so closely.
On “Black Monday,” October 19th of 1987, stocks crashed a full 22% in one day – a record that scared the hell out of investors worldwide.
Similarly, on “Black Tuesday,” October 29th of 1929, stocks finished up a 25% crash that started the previous day and ushered in the Great Depression.
The parallels between 1929, 1987 and today are many, as those crashes took place in October and were preceded by long periods of “easy money” policies, huge runups in stock prices, and/or quick increases in interest rates.
It is not just a bunch of internet nuts illuminating these parallels too, as the most prominent piece came from Bloomberg: No One Wants To Remember 1987.
Bloomberg shared multiple charts to illustrate their case.
The chart immediately below shows how similar the bond yield spikes we have been seeing this year match 1987’s.
And the chart below that shows how similar this year’s NASDAQ is to 1987’s Dow Jones.
Bloomberg also showed how similar 1987’s Dow was to 1929’s, but I omit that chart because I think I have made my point.
What makes the 1987 crash particularly interesting is that bond prices tanked (pushing yields way higher) while stock prices went through the roof – exactly like we have been seeing in 2023.
So – do I think this will happen for sure? No, but I will give it a 10% chance.
Given that it is October (a month when financial crises seem to surface more often) and given that rates have recently climbed that much more, I would not be shocked to see some sort of stock market correction.
When Stocks Crash, Rates Fall
If stocks do crash, rates will fall significantly in response, as investors flee stocks for the safety of bonds. This is illustrated in the top chart.
Note too that if you search for “Stock Market Crash” on YouTube, you will see dozens of videos pop up making a case similar to Bloomberg’s.
Here are a few examples: Stock Market Crash Coming and BREAKING: Markets Go Haywire Today After This Terrifying Report!