Catching up to bonds, rates started the week lower with the 30-year fixed rate mortgage down 11 basis points at 3.14% and the 15-year mortgage down 9 basis points at 2.53%.
As we head into November, which has historically been the best month for stocks, investors continue to eye the Federal Reserve for any hint of a rate hike. While tapering has long been anticipated this year, the issue of rates is still up for debate. Federal funds futures have priced in a rate hike by September 2022, leaning on inflation data like the core personal consumptions expenditures (PCE) report. Others argue that the Fed will want to see better employment numbers before making a move and therefore don’t foresee rates going up until 2023. In other news, tenants who had snagged discounted apartments last year are now experiencing rent surges post-pandemic. By Zillow’s estimate, rent increased 9.2% year-over-year in September. Owners aren’t getting off scot-free either with the Owners Equivalent Rent (OER) up 2.9%. While some of these effects are due to COVID recovery, many attribute these rent hikes as well as housing price increases to the “AirBnb effect,” or an uptick in short-term rental spaces. This was evident in Oregon, Colorado, and Minnesota where voters had to decide whether to put restrictions on short-term rental properties in yesterday’s elections.