Navigating the Housing Market: Understanding the Impact of Federal Reserve Actions

Economy Resource Management

Stay informed about the housing market and economy with insights for real estate professionals and tips for discussing the market with clients. This article covers 30-40 minutes of updates on the housing market and economy, including a Q&A session at the end for questions related to the housing market.

Understanding the Impact of Federal Reserve Actions

⭐A recession occurs when the Federal Reserve raises interest rates to decrease spending and borrowing.

⭐Demand in the housing market is determined by the cost of money (interest rates), while supply is the number of homes for sale.

⭐The Federal Reserve's actions aim to create a recession by reducing inflation and decreasing demand in the housing market.

⭐GDP has decreased for two consecutive quarters, indicating a recession.

⭐The inverted yield curves between the 10-year treasury and the two-year treasures also suggest a recession.

Anticipating Market Movements and Future Rates

🔍The video emphasizes the significance of paying attention to the FED's actions and statements to anticipate market movements.

🔍The FED's goal is to achieve 2% inflation.

🔍The video discusses the uncertainty regarding whether the FED will raise or lower rates in the future.

🔍The goal of the Federal Reserve is to take money away from the economy, and one way to achieve this is by people losing their jobs.

🔍Unemployment going up is typically a sign that a recession is imminent.

FAQ

How does the Federal Reserve's actions impact the housing market?

The Federal Reserve's actions, such as raising interest rates, aim to decrease spending and borrowing, which can lead to a decrease in demand in the housing market. This can result in a recession, impacting both buyers and sellers.

What are the indicators of a recession in the housing market?

Indicators of a recession in the housing market include a decrease in GDP for two consecutive quarters, as well as the presence of inverted yield curves between the 10-year treasury and the two-year treasures.

How can real estate professionals anticipate market movements?

Real estate professionals can stay informed about the Federal Reserve's actions and statements to anticipate market movements. Additionally, paying attention to indicators such as unemployment rates can provide insights into potential market changes.

What impact does unemployment have on the housing market?

An increase in unemployment is typically a sign that a recession is imminent, as it can lead to a decrease in consumer spending and demand in the housing market.

How does the Federal Reserve's goal of achieving 2% inflation affect the housing market?

The Federal Reserve's goal of achieving 2% inflation can impact the housing market by influencing interest rates and borrowing costs, which in turn can affect demand and supply in the housing market.

Summary with Timestamps

🏠 0:08This video provides an update on the US housing market, the economy, and predictions for 2023 and 2024.

💰 5:13The video discusses how the Federal Reserve raises interest rates to reduce spending and borrowing, leading to a recession in the housing market.

🤔 10:34The speaker discusses the technical data indicating a recession and explains that a recession is a period of receding economic growth.

📈 15:57The video discusses the importance of monitoring the 10-year and mortgage-backed security markets to understand the impact of the FED's actions and statements on the market.

📉 20:29The video discusses how an increase in unemployment is seen as a positive sign by the Federal Reserve as it helps lower prices.

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