Dr. Marci Rossell: Top 5 Economic Insights

Dr. Marci Rossell is the Chief Economist of Leading Real Estate Companies of the World, a Michael Saunders & Company affiliate. This blog covers her top five economic insights for the month.

Inflation

September remained steady month over month at 8.2%. However, Dr. Rossell points out that we have been experiencing a relatively steady decline in inflation since its peak at over 9% in June. While recent shocks to food prices hindered the inflationary downtrend, a major driver of recent inflation - used car pricing - is now edging down significantly month over month. In short, consumer spending patterns overall are starting to return to normal, and inflationary patterns are reflecting that trend.

Federal Reserve Activity

We are likely to see two more Fed rate hikes before the end of year, with 75 basis point bumps anticipated in November and again in December. We are now ten months into the strongest tightening cycle of the past decade, as the Fed continues its campaign to pull back the current inflationary trends.

Energy and Gas

OPEC's recent controversial move to cut production is likely in response to simple falling demand. Dr. Rossell reminds us that OPEC is no longer the driving force of oil pricing that it once was, as the United States is now on par with Saudi Arabia in terms of oil production. Compound this fact with China's weakening oil demand due to its worsening recession, and, overall, OPEC's production cut is not likely to have a significant impact on the world's energy supply.

Mortgage Rates

Industry headlines are sounding alarms over the recent hike in mortgage rates to over 7%, but Dr. Rossell reminds us that 7% is the long-term average. If the Feds continue to raise rates, we will likely see additional increases in mortgage rates, albeit not necessarily at a steady pace, as swings are likely during times of economic uncertainty.

Housing Prices

While we have seen a drop in home sales since the beginning of the year, homeowners are still building equity, even as home prices stabilize across the country. While the market is slowing down, Dr. Rossell emphasizes that what you are experiencing is a return to normal following an unprecedented 24 month overheating of the housing market.

Let’s connect so you can have a full picture of today’s housing market in our area. Together, we can better understand your options whether buying, selling, or both. Call me at 818-416-2505 or drop me a line: beverlysthilaire@michaelsaunders.com