Think of this as your one month into the 3rd Quarter market update from the Island Land Company.  The last couple of blogs have been a bit more personal, but today I plan to stick to giving you all the facts and numbers of the current market today. The hottest topic of them all? You guessed it, the seemingly ever increasing mortgage  interest rates.  And yes, they are continuing to climb.  As these rates continue to grow and the market is starting to bubble. The market has been put at a bit of a standstill.  Buyers are falling into two categories, some are holding their water while others are jumping in with anticipation of rates dropping and refinancing at a later time.  I am not to say either strategy is right or wrong, as we all know, what ever you were to decide, you are often times seen as an idiot up until whatever it is that you decided to do works or turns out for the best. 

The proof of the bubble and stagnation lies within the relation between bonds/stocks and the mortgage rates set by the Fedral Reserve (FED), according to  Last Friday ay the gain on bonds was significant enough to elicit a historically relational drop in interest rates, however interest rates did not drop. Why is this? 

There was some speculation, and two theories emerged out there that I personally think would be the most ideal reason for the unusual lack of correlation.  

The first theory is that the lending institutions looked into a report that is released 8 times per year by members of the board at the FED.  When looking at the report from the September meeting held by the members, the meeting in September left inclinations that the members anticipated the Federal Funds Rates (an instrument put into place to try and defend against rising interest rates) to drop more significantly by the end of 2024, in turn the market was influenced as such, beings that the interest rates remained the same in order to try and establish a correction against the rising inflation rate.  So while the markets saw a boost, it was short lived, or shorter lived than experts would have liked because of the unmoving interest rates.  

This bump was felt and seen by the stocks and bonds markets, with a boost in prices to the S&P, but the 10 year trajectory for the S&P is still predicted to decline as inflation is predicted to rise.  The day that this report is published is known as “Fed Day” in the mortgage and stock market spheres.  

The second theory is that there is a reverse effect coming from the buyers standing still on their decisions to go in for a loan. This second theory is saying that the buyer is putting pressure on the Fed and the lending institutions by not buying and holding still as long as possible, then on the opposite side, the Fed is playing “hard ball” while maintaining the current interest rates due to the stress being applied to the market via the looming inflation rates. I personally lean more toward the camp of the first theory, with “Fed Day” being the primary mover of the needle.  

On another note, at this current point in time you could also say that there is a record setting amount of pressure being put onto lending institutions as they have a job to do as well.  Let us keep in mind that a loan officer’s job is to lend money, take a % of that as gain, and then rinse and repeat.  This has become difficult to do however if rinsing and repeating is not happening because no one is coming in for loans.  


Lenders are not all “sharks” who want to bankrupt you, take your money, and property.  At the same time, a great line I heard at a conference I attended was that “not all lenders are created equally.”  This holds true in my opinion, but I do feel for those who work at these lending institutions as their jobs are being put into jeopardy due to the current condition of the market.