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Moving the Market

Following breaking news in both crypto and real estate, plus understanding the events behind the latest market moves can be confusing and time-consuming.

In our weekly update, we will give you an overview on the hottest topics currently influencing the macro, real estate industry, and more…

Now, let’s dive in.

Inflation report

One of the key reports that the market was eagerly expecting was the US inflation report. The US economy is facing lower inflation compared to June (9.1%) and July (8.5%) but the prices of goods and services are still higher than expected. During the last 91 days, we saw gas prices falling, relieving some inflationary pressure.

The inflation numbers and the report on the labor market are the two components that pave the way for the FED and the monetary policy they will follow. Earlier this year US inflation hit the highest level in the last 40 years. The FED went Hawkish on increasing interest rates in order to get prices under control but it seems that they plan to tighten the belt even further. Some FED officials shared expectations of another 75 basis point rate hike.

Real Estate Market is slowing down

The real estate market continues to normalize with sales dipping below last year’s level. Some properties are staying on the market for longer – around 24 days leading sellers to reduce prices more frequently.

The 30-year fixed-rate mortgage (FRM) is headed to a 6% benchmark after increasing for a third consecutive week. According to Freddie Mac’s survey, the weekly average for the FRM rose from 5.66% to 5.89% – the highest since 2008 and surpassed an earlier high of 5.81% set in June.

In addition to the above, mortgage applications to purchase a home decreased by 1% on a week-to-week basis and dropped by 23% for the same week a year ago. With the costs of borrowing money continuing to rise, the application volume for purchasing homes is expected to continue dropping. Economists expect that mortgage interest rates are not expected to decline any time soon.

Ethereum 2.0

And let’s not forget the crypto market. This week all eyes are on Ethereum 2.0. This is one of the long-awaited events that will change the mechanics the ecosystem uses. Ethereum will merge from a Proof-of-Work to Proof-of-Stake consensus mechanism, which will significantly boost scalability and decrease energy consumption. According to studies, the protocol’s energy usage could decrease by 95% while increasing transaction speed. The Merge is a big step forward and creates space for less regulatory pressure. The lack of technical problems so far also means we at Propy made a good choice of the network for the future of real estate.

With more and more DeFi and NFT applications building on Ethereum, the Merge will definitely help crypto mass adoption.

That was our short but sweet market weekly update by Propy. See you next week!

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