May 30, 2023
Why did we put these three words together? First, we just celebrated Memorial Day. Though summer does not start officially for a few weeks, Memorial Day is the unofficial start of the summer season. It is the time that school starts to let out and the masses plan their vacations. In the real estate market, things usually slow down a bit in the summer as the spring market winds down. Only, this is not your ordinary June. Why is that?
For one, the Federal debt limit is supposed to be reached in early June. Now we have this “crisis” every year or so and Congress always acts to save the day at the last second. But this year we have a “split legislature” and the saber rattling will be even more noisy than usual. As the deadline approaches, the financial markets could become very uneasy, to say the least. Which brings us to the last word – banks.
Though the government would not agree, we definitely are in the midst of a banking crisis. We have had three major regional banks go under. The impetus? Higher interest rates putting a strain on these institutions. This situation also can provide much consternation in the financial markets. Put it all together and you could very well have the Fed pausing their rate hikes when they meet in June. If the financial markets sense instability, long-term rates such as mortgages could fall. If that happens in June or July, the real estate market could actually heat up with the weather. Mind you, this is all speculation, but June could be an interesting month.
Source: Origination Pro
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