Rate Cuts vs. Inflation: What It Means for First-Time Buyers in Minneapolis

Inflation in plain English

• PCE inflation came in about as expected.
• Not scary, but not low enough to guarantee more cuts this year.
• Markets didn’t freak out, but they didn’t celebrate either.

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What that means for you: Don’t count on more cuts right away. Plan for a rangeof possible rates.

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Government shutdown: why it matters tohomebuyers

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If Congress doesn’t pass a funding bill by October 1, here’s what couldhappen:

• Data delays: Big reports (jobs, inflation) could be paused, which makes markets jumpy.
• Closing  slowdowns: Some federal verifications (IRS, flood insurance, certain loan programs) can slow or pause—this can delay closings.
• Rates could  wiggle: Sometimes “uncertainty” pushes investors into safer bonds, which can help rates. Other times, it adds risk. Expect choppiness.

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Bottom line: A shutdown is messy. It doesn’t stop homebuying, but it can add delays.We plan around it.

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Will buyers freeze up?

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Not always. Life keeps moving—new jobs, babies, downsizing, divorces. Westill see first-time buyers stepping in and more investors looking. Real estateis a tangible asset; that steadiness matters when the news is noisy.

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What recent buyers say (and why itmatters)

• The process is stressful. About 9 in 10 buyers say so.
• Surprises are  common. Many are shocked by closing costs and other fees, not just the price of the house.
• They still moved forward. Most bought because of life timing, not “perfect” market conditions.

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My take: The long-term benefits of owning are real. But the real driver is life. Our job is to make the numbers clear and the plan doable.

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How I’m guiding Minneapolis first-timebuyers this week

1. Pick a “no-regrets” payment first.
       We set a monthly comfort number (mortgage, taxes, insurance, HOA if any, winter utilities, and a small maintenance cushion). Then we back into     price.
2. Win offers without overpaying.
       We use guardrails: clear ceilings on escalations, smart appraisal strategies, and when to use seller credits vs. a temporary buydown.
3. Budget for the “extra” costs.
       Closing costs, prepaids, inspection, moving, first-year fixes. Surprises cause stress—so we remove them.
4. Have a Plan B for a shutdown.
       If one path slows (like a verification), we have another route ready so your timeline stays on track.
5. Decide based on life; optimize the math.
       If your life says “now,” we build a plan for “now”—no gambling on headlines.

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Quick recap

• The Fed cut is old news; inflation direction and D.C. drama are driving the bus this week.
• Rates dipped before the cut and have been choppy since. Expect a range until inflation cools more.
• Locally, inventory  is inching up and applications are improving, but pricing is still case-by-case. Prep = leverage.

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