Investment Learning

  • October 24, 2024

Homebuyers still price sensitive as mortgage rates climb: Economist

Mortgage rates rose for their fourth straight week, the 30-year fixed rate mortgage now sitting at 6.54%. Existing home sales also fell to a 14-year low, the National Association of Realtors reporting a figure of 3.84 million for the month of September. Market Domination welcomes Realtor.com chief economist Danielle Hale to talk about this week's wave of housing and mortgage data. "A lot of consumers were expecting mortgage rates to trend down for longer than they have. The economic strength that we've seen in... the most recent job market reading has caused a bit of a rebound in interest rates, including mortgage rates," Hale explains to Julie Hyman and Josh Lipton. "And so consumers have been a bit caught off guard. And we haven't seen the improvement yet. I think people were waiting for more and we just haven't seen that yet." Hale anticipates mortgage rates to sit just above 6% this time next year. Currently, she is seeing "extraordinarily resilient" home prices as new homebuyers pull out of their housing market searches. "And so that the fact that supply only just meets demand has kept prices relatively elevated. So I don't think we're going to see a lot of pricing relief unless we add a lot more construction," Hale tells Yahoo Finance. Hale expands the conversation to explain how homebuyers can improve their odds of a lower mortgage rate, as well as nationwide trends in rent prices. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Luke Carberry Mogan.

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  • October 24, 2024

Why you should skip big banks and buy regionals: Strategist

Today on Yahoo Finance's Good Buy or Goodbye, Host Julie Hyman welcomes Interactive Brokers chief strategist Steve Sosnick to discuss the financial sector, where he explains his preference for regional banks over major financial institutions. Sosnick recommends investors buy the S&P Regional Banking ETF (KRE). He emphasizes that the steeper yield curve particularly benefits smaller banks, explaining "the steeper the yield curve, the bigger the differential between what they're borrowing versus what they're lending," which directly improves their bottom line. The ETF also offers more attractive valuations compared to the the Financial Select Sector SPDR Fund (XLF), with Sosnick noting "it's time to shift toward the one that's showing good momentum." Furthermore, he points to improving sentiment around commercial real estate lending, observing there are "fewer and fewer horror stories" in the sector. Regarding the Financial Select Sector SPDR Fund (XLF), Sosnick expresses several concerns. He notes its elevated valuation after being "on a tear," and advises investors to "look a little more broadly than just the leaders." The fund's concentration is another worry, with just four stocks making up about a third of the holdings, and it's "not top heavy with banks." Additionally, he points out the fund's exposure to consumer spending, suggesting potential underperformance if consumer activity slows. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Angel Smith

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