Over the last month, there has been much talk around the volatility in interest rates, with the 10-yr Treasury rising from 4.95% on September 22nd, to a high of 5.31% by October 5th, falling back down to 5.10% currently. While this volatility in interest rates can be unsettling, it does present opportunities. As a reminder, the value of existing bonds decline as interest rates rise. As such, with the general level of interest rates on an upward trajectory since the beginning of the year, many bond funds have experienced a decline in price. This allows opportunities for tax-loss harvesting. Tax-loss harvesting is a powerful tax planning tool. It allows investors (or your RSWA advisor😊) to realize losses in your taxable accounts, park the proceeds in a money market fund, and after 31 days, buy back the same funds. Investors can then use these losses to offset capital gains that may have been realized earlier in the year, or to offset up to $3,000 in ordinary income. Additionally, these losses can be carried forward indefinitely. While losses aren’t normally looked at in a positive light, they can be used to your advantage.
3rd Quarter Earnings Season Picks Up Steam, Magnificent 7 Begins Reporting
While fall foliage is peaking around most parts of the country, earnings season for S&P 500 companies will be doing the same over the next two weeks. By the end of October, the majority of companies in the S&P 500 will have reported, including 5 of the Magnificent 7 tech names (Meta, Tesla, Alphabet, Microsoft, and Amazon) with Apple and Nvidia to report in November. There is no denying the importance of these 7 companies, as altogether they make up approximately 1/3 of the index. Expectations are elevated, and if the S&P 500 is to make new highs before the end of the year, the Magnificent 7 will need to deliver. Q3 Tech Earnings Preview: Can AI Save the Day? | Charles Schwab
The Housing Market Can’t Seem to Catch a Break
It is no secret that the housing market continues to be the main pain point for Millennials and Gen Z. With the average age of first-time homebuyers reaching 40 for the first time ever, many younger Americans see their first home purchase as unattainable anytime soon. Factors working against them:
- Since the onset of the COVID pandemic in 2020, the median price of U.S. homes has surged 50%+. While this varies widely based on state, unfortunately for those of us in the Northeast, those prices have soared even more – with both Maine and Vermont experiencing the greatest increase at 62%.Map Shows Where Home Prices Have Soared the Most And Least Since COVID - Newsweek
- Housing inflation has far outpaced the broader inflation rate, including wages.
- The supply/demand imbalance swung drastically at the onset of COVID, where historically low-interest rates led to a dramatic increase in demand, while many parts of the country continued to experience a significant under-supply of homes.
- Mortgage rates - taking out the historically low-rate environment from 2020-2022, the move we have seen in rates over the last 12 months has been meaningful, with the average rate on a 30-year fixed mortgage increasing from the low 6’s to mid 7’s. Mortgage Rates – Freddie Mac
- The outlook through the end of the year remains sour: Housing is flashing warning signs just as the Fed weighs more interest rate hikes
Potential Reasons for Optimism Over the Longer-Term?
I don’t want to be all doom and gloom when it comes to the housing market. Some reasons for optimism as the calendar turns to 2027:
- Many forecast mortgage rates back to levels in the low-to-mid 6’s.
- More modest increases in housing prices.
- The strong labor market is expected to continue.
2027 Housing Market Forecast: Complete Guide to Prices, Rates & Trends
Quick Hits:
- The money in college football - here are the programs that bring in the most revenue: College Football Revenue by Team: Top 50 Programs Ranked
- Maine is at peak, but maybe where you reside isn’t: 2026 Fall Foliage Map & Peak Leaf Color Forecast | The Old Farmer's Almanac
- College basketball season is just over a week away, here are the preseason rankings: College basketball rankings: Florida earns No. 1 spot in preseason AP Top 25 poll ahead of Duke, Illinois - CBS Sports
- Next on the reading list: Vibe: The Secrets of Strong Connections in a Lonely World by Adam Grant | Goodreads
- Helpful tips around air travel this holiday season and into 2027: When to buy holiday flights in 2026-27 - The Points Guy
Shout Out to My Alma Mater
I made a quick trip back to TN this past weekend to watch Tennessee play Alabama. For the third consecutive time in Knoxville, the University of Tennessee was able to muscle out a victory against our longest-standing rival. Nothing beats the pageantry of college football, especially the “Third Saturday in October.”
Quote: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Winston Churchill
Thank you for reading RSWA Financial Advisor Insights! We welcome feedback, and please forward this to a friend! Be well, take care, and stay safe!
