How to Prepare for the Thawing of the Real Estate Market
Feb 5, 2024
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Matt Garland, aka 'MG The Mortgage Guy', shares his best advice on how to prepare for the real estate reawakening. The stock market reaches record highs, but there are concerns about the narrow bull market. Investors should hope for a blowout in Sunday's Super Bowl. The podcast discusses the impacts on the real estate market and key factors to consider when preparing for it. It also explores selling homes, refinancing, cash on cash return in real estate investing, and the Super Bowl indicator.
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Quick takeaways
US job market shows robust growth in January, indicating confidence in the economy and strong corporate profit outlook.
First-time homebuyers should take advantage of the current low competition in the US housing market, while sellers may benefit from waiting for mortgage rates to rise further.
Deep dives
Strong job market fuels record highs for Dow and S&P 500
The Dow and S&P 500 closed at record highs as the US job market showed robust growth in January, with 353,000 jobs added. This exceeded expectations and indicated strong corporate profit outlook. Companies, especially in professional and business services, healthcare, and retail, have been hiring in higher paying salary job sectors, indicating confidence in the economy.
Impressive earnings and stock buybacks fuel tech giants
Tech giants like Meta and Amazon saw surges in stock prices due to better-than-expected earnings. Meta's announcement of a $50 billion stock buyback and its first-ever dividend led to a $196 billion market cap gain in one day, the largest in history for any company. The positive response to Meta's moves may lead to similar actions by Amazon. While Apple's soft outlook for the year impacted its stock, the overall market, including the S&P 500, rallied to new all-time highs.
Fed holds rates steady, but rate cut hopes diminish
The Federal Reserve decided to hold rates steady, as expected, but Chair Powell's indication that a rate cut is unlikely in the near future reduced expectations. Markets had hoped for a monetary policy loosening, but odds of a rate cut in March dropped to 20% after Powell's remarks. However, the Fed fund traders still anticipate a quarter-point cut in May. Long-term investors are now focused on fundamentals, corporate profits, and earnings outlook in light of subdued inflation.
Real estate market outlook and advice for investors
The US housing market is expected to see a slight increase in appreciation in 2024, with mortgage rates projected to reach the 5% range. For first-time homebuyers, now is a favorable time to purchase a home, as competition is lower during the winter. However, sellers may benefit from holding off until mortgage rates rise further. Real estate investors are advised to consider factors such as the responsibility of being a landlord, having sufficient capital and reserves, and being prepared for potential repairs and tenant issues.
Matt Garland, aka 'MG The Mortgage Guy', on what to expect for the U.S real estate market this Spring as mortgage rates fall and demand comes storming back. Whether you are a potential buyer, seller, investor, or broker, Matt shares his best advice on how to prepare to capitalize on the real estate reawakening. Plus, the stock market tops more record highs, but there are rising rumblings about the strength of one of the narrowest bull markets in history. And, why investors should hope for a blowout in Sunday's Super Bowl.