Investment Learning

  • August 23, 2024

How lower rates would affect new vs. existing home sales

Housing stocks are rising following Federal Reserve Chair Jerome Powell's dovish comments at the Jackson Hole Economic Symposium on Friday, which signaled interest rate cuts to come that could feed into mortgage rates. This comes alongside surprisingly strong new home sales data for the month of July. With the US housing market in need of relief, HousingWire lead analyst Logan Mohtashami joins Market Domination to discuss the potential impact of a rate cut on the housing market. Mohtashami distinguishes between two segments of the housing market: new homes from builders and existing homes sales. He explains that when rates fall, homebuilders can "sell homes like a commodity," while existing homes "do not have that ability." Existing homes are struggling to sell because the market hasn't seen mortgage rates under 6% for quite some time, Mohtashami explains. "I think the builders will always have a rate advantage until mortgage rates get well below 6% for the existing home market," Mohtashami tells Yahoo Finance. "If mortgage rates fell 2% and actually stayed lower below 6%, the existing home sales market could get some traction." For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Angel Smith

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  • August 23, 2024

What lower mortgage rates mean for homebuilders

US mortgage rates have fallen lower this week, with the 30-year fixed-rate mortgage now below 6.5% and the 15-year fixed-rate mortgage below 5.65%. This gives some relief to potential homebuyers but adds more competition to homebuilders (XHB). Yahoo Finance housing reporter Dani Romero joins Wealth! to break down what lower rates mean for potential home buyers and major homebuilder stocks. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Nicholas Jacobino

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  • August 23, 2024

Falling mortgage rates creating 'more choices' for homebuyers

US new home sales jumped by over 10% month-over-month in July, according to the US Census Bureau. The National Association of Realtors reported existing home sales to have risen by 1.3% month-over-month in July. National Association of Realtors (NAR) Chief Economist Lawrence Yun sits down with Brad Smith on Wealth! to talk about what this data is signaling about the US housing market, especially after Federal Reserve Chair Jerome Powell communicated plans to cut interest rates in September in his Jackson Hole speech. "Definitely, we are in a downward trend in mortgage rates. Housing sector [is] always one of the most sensitive to the mortgage rate changes, and consequently mortgage rate today at one-year-low level at under 6.5%, we have not seen this for the past 12 months," Yun tells Yahoo Finance. "Very good news. Moreover, more inventory means more choices for consumers." Yun believes falling mortgage rates — the 30-year fixed-rate mortgage now sitting at 6.46% — will open up new opportunities for homeowners, especially for those moving on into new life stages and wishing to sell. "So all [these] pent-up potential sellers, I think, will steadily move into the market as mortgage rates decline. Of course, it's not a 3%, 4% mortgage rate, but it is a positive development for the real estate [market]," Yun explains. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Luke Carberry Mogan.

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  • August 22, 2024

How AI investments are shaping the tech sector's future

Nvidia's (NVDA) stock continues to rally ahead of its highly anticipated quarterly earnings report on August 28th. To discuss the potential impact of the semiconductor giant's results on the broader tech sector (XLK), Bernstein Internet Equity Research Analyst Mark Shmulik joins Morning Brief. Shmulik notes that when it comes to the AI trade, tech giants have made it clear that "the risk of underinvesting is much higher than the risk of overinvesting." He believes that "so long as that momentum continues," the entire tech sector stands to benefit. Regarding tech valuations, Shmulik observes they have cooled and "are not demanding." However, he emphasizes that companies must "deliver on the core business ahead of you today" to fund their ongoing AI investments. Notably, with companies like Alphabet's Google (GOOG, GOOGL) beginning to see returns on their AI investments, Shmulik points out that "it's no longer talk of a theoretical, it's actually showing up in the numbers." When it comes to investment opportunities in the AI space, Shmulik highlights Meta (META) as "one of the cleaner names" for those looking to participate in the AI trade. For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Angel Smith

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