What to Watch

Determining the Path of The Federal Funds Rate

The radar screen is full of important events as 2022 comes to an end but one headline risk is front and center...the two-day mid-December Federal Open Market Committee on December 13-14th. Fed members will convene to determine the path of its short-term Fed Funds Rate (FFR), discuss the overall economy, where inflation is now and its impact on monetary policy going forward.

The Fed has increased the FFR by 3.75% this year, the fastest pace of hikes since the early 1980s to bring down runaway inflation. This has led to a Prime Rate of 7% from 3.25% seen a year ago. The Prime Rate is the interest rate that commercial banks charge their most creditworthy customers, generally large corporations and highly qualified individuals.

In the past month, we have seen inflation pressures cooling a bit with lower readings from the Consumer and Producer Price Index. Lumber prices have declined, frothy home price gains are easing a bit while costs for medical care services, used vehicles, and apparel have been decreasing. However, food, energy, and shelter costs are still stubbornly high and are staples of the American household.

One other aspect of the economy to look for as the year comes to an end and 2023 rings in is how the consumer holding up. Consumer spending makes up two-thirds of the U.S. economy and if spending declines it will come at the expense of economic growth. A Fed member recently said that we are going to see significant softening in the economy. Does the Fed feel that the consumer is tapped out? Time will tell. The New York Federal Reserve reports that total U.S. Household Debt hit a record $16.51 trillion in the third quarter of this year. That could be a clue.

Source: Mortgage Market Guide

Housing News

Tips for Working With a Realtor

While you can technically buy and sell your property without the assistance of a real estate agent, using an agent can help make the entire process easier. Before you start searching for a home and begin working with a real estate agent, keep these tips in mind:

State your expectations. Your real estate agent isn't a mind reader, so you need to set forth what you want out of your home. Calculate how much home you can afford, where you want to live, and what aspects are non-negotiable.

Be respectful of their time. Real estate agents likely have several clients, and may plan their schedules ahead of time. Since they often aim to be efficient with their time, let them know what times work best for you so they can align their schedules with yours.

Don't work with more than one real estate agent. Other countries encourage home buyers to hire several agents at once, but that's because they don't have a central database of listings. Since the United States has the MLS (multiple listing service), agents have access to the listings. Hiring more than one agent can cause miscommunication and confusion.

Knowing what to expect when working with a real estate agent can prevent miscommunication and help you work as a team to locate the house of your dreams. If you have further questions about joining forces with a realtor, contact your local real estate agency.

Sources: Dwellingwell.com, Investopedia.com, Effectiveagents.com

Home Improvement 

Home Maintenance Tips for Cold Weather

It's simple to forget about preparing your home for colder weather, but it's an extremely vital step of homeownership. Doing so can help you avoid expensive repairs and uncomfortable drafts. While you can complete some of these tasks in an hour or less, others might take a few days, so plan accordingly.

Protect entryway flooring. If you live in an area that experiences snow and ice, you know your floors can take a beating when you track precipitation and road salt inside. Place floor mats inside and outside the entrance, and add a waterproof tray inside to place boots.

Clean the gutters. Clogged gutters can cause water damage and ice dams. Clear leaves, sticks, and other debris from them so water flows freely.

Stop cold air from entering. Take action as soon as you notice an issue. Check and repair caulking around windows and doors, examine the weatherstripping, and seal cracks in foundation walls.

Prevent pipes from freezing. Since water expands when it freezes, frozen pipes can burst and cause extensive damage. To minimize the chances of this happening, insulate the pipes and disconnect outside hoses.

No matter if you live in an area that experiences heavy rain or massive snowstorms, getting your home prepared for a dip in temperatures can help you remain prepared. You can check off many of these items in just a day, so make sure you complete them before winter hits.

Sources: Houzz.com, Mrhandyman.com, Allstate.com