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To see current market stories scroll down for up to the minute stories and news regarding the stock markets and the interest rate markets.  The following charts show the current Real Estate Trends for the Greater Sacramento Area.

Statistics are for the Greater Sacramento area including Sacramento, Yolo, Placer and Eldorado Counties

How Higher Priced Homes and Technology Killed Inflation:
It has long been the Federal Reserve's Policy to fight inflation by raising interest rates to slow consumers from spending too fast and causing inflation.  So you might ask why with housing prices rising to an almost unaffordable high that the Fed (the Federal Reserve) has not raised interest rates to combat such high housing prices.  Well, the answer might surprise you or it might just be so obvious that you slap your economic head and say wow that's right.  Inflation is a rise in prices of consumer goods and services over time given in a percentage of gain from month to month or year to year.  The rise in housing prices can and is quantified the same way, however, the big difference between goods and services and Housing prices is that consumers need the basics every month like food, consumer goods, and services from plumbers, electricians, etc., but consumers don't buy houses every month.  On average people stay in their housing for an average 5-7 years thus not being affected by housing prices until it is time to move.  In addition, when housing prices go up and people stay in their homes for an average of 5-7 years they end up realizing price gains on their existing home and this is called realized equity.  So when the prices of goods and services increase month to month consumers need the basic items to live so they will buy them realizing no equity as these items are consumed. 
     Household income plays a factor in inflation as well as the more money people make the more they tend to consume.  So if America on the average is making more money they will consume more creating a higher demand for goods and services thus prices will rise to offset the higher demand.  So why doesn't such high priced housing effect interest rates?  Simply put housing is not something consumed it is an asset that has trade value or equity.  In addition, people are not in need of purchasing housing every month or every year for that matter. 
     It has long been the Federal Reserve's policy to keep inflation around 2% and since the 1970's the Fed has done a great job of keeping in check.  However, I believe there are other factors in play the Fed is not taking into consideration.  I will say that the high priced housing has used up far more of the average household budget thus leaving consumers less money to buy goods and services with.  This may either be by design, but I would contend that it is actually a happy accident in the Fed's favor. If you are spending the majority of your income on your housing expenses that leaves you with less money to buy goods and services.  In addition to that technology is such a big part of today's world that people don't need or want for more personal items to keep them entertained or fulfilled thus lower demand for certain physical items.  It is tough to have inflation if the demand for things goes away and that is what technology has done.  An example are college kids these days. College kids need to eat, drink and study, but with their smartphones, they can get everything they need on that device delivered to their door and their entertainment is at their fingertips.   Technology has slowed the need or the demand for goods and services and by doing so has slowed inflation.  I hope this has enlightened you on how the markets work and how they change.  I will predict that we see some changes in the Federal Reserve's approach to fighting inflation by raising interest rates in the future with the onset of even newer technology advances.     

Current News Feeds:

Current Market News:
 
10-year Treasury yield hits highest level in more than a week
10/19/2020 12:18 PM
(Please visit the site to view this media)CNBC's Scott Wapner with Scott Nations of NationsShares on "Futures Outlook" discuss the 10-year Treasury yield hitting its highest level in more than a week....(Read More
 
Homebuilder sentiment jumped in October, the second month in a row
10/19/2020 10:48 AM
(Please visit the site to view this media)CNBC's Diana Olick reports on October's NAHB Sentiment Index. She also reports that new single family sales are outpacing housing starts by a historical margin....(Read More
 
This holiday season could be the first time sales are left on the table: Retail analyst
10/16/2020 2:19 PM
(Please visit the site to view this media)Simeon Siegel, BMO Capital Markets senior retail analyst, joins 'Power Lunch' to discuss the retail industry as the holiday season approaches. He explains which brands should continue to exist during this time, the deals consumers c...Read More
 
Industrial production dropped 0.6% in September, vs 0.5% increase expected
10/16/2020 12:44 PM
(Please visit the site to view this media)CNBC's Rick Santelli breaks down the September read on industrial production....(read more)
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Preliminary consumer sentiment climbs higher than expected in October
10/16/2020 11:12 AM
(Please visit the site to view this media)CNBC's Rick Santelli details the preliminary consumer sentiment numbers for October, as well as the outlook going forward....(read more)<...Read More
 
Retail sales rise 1.9% in September, vs 0.7% expected
10/16/2020 9:04 AM
(Please visit the site to view this media)CNBC's Rick Santelli breaks down the September numbers on retail sales....(read more)
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Why jobless claims may not be an accurate representation of unemployment
10/16/2020 9:03 AM
(Please visit the site to view this media)CNBC's Steve Liesman breaks down the increasing concerns that jobless claims numbers could possibly reflect errors or fraud that would make the jobs situation more or less troubling than they may appear......Read More
 
Prospects for a stimulus deal remain dim—Here"s the latest
10/16/2020 9:03 AM
(Please visit the site to view this media)President Trump and Treasury Secretary Steven Mnuchin are giving some ground to the Democrats for a stimulus deal, but prospects for an agreement remain dim. CNBC's Eamon Javers reports....(Read More
 
BlackRock"s Jeff Rosenberg on market excitement over a stimulus deal and European equities
10/15/2020 3:09 PM
(Please visit the site to view this media)Jeff Rosenberg, BlackRock Systematic Multi-Strategy Fund portfolio manager, joins 'Closing Bell' to discuss market sentiment regarding the prospects of a stimulus package and the performance between European and U.S. equities.
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Why this trader is bullish on the 10-year futures trade
10/15/2020 1:05 PM
(Please visit the site to view this media)The 10-year yield is under pressure. Jeff Kilburg, KKM Financials, joins 'Fast Money Halftime Report' to discuss why he's bullish on future prices and bearish on yields....(Read More