A cartographer and a meteorologist applied for the same job at a top tech company. During the interview, they were asked why they chose their careers. The cartographer said, “I wanted a career where I could map out my success.” The meteorologist replied, “I chose mine to forecast my own bright future.” The interviewer, amused, said, “Well, one of you will find this the perfect climate for growth, while the other might find themselves in uncharted territory!”
That short anecdotal tale is the perfect segue to the two key themes that I believe will dominate this year and significantly impact your finances and future: “Jobs” and “Geography.
The year will conclude with a new president of the United States. I will go out on a limb and say that I don’t think Joe Biden will be the Democratic candidate come November. Feel free to reach out privately to find out what I think about this topic. Regardless, it will be another nail-biting showdown of red states versus blue states and expect anything but a tame battle till the end.
By now, we know that the Federal Reserve has forecasted three rate cuts in 2024, starting as early as March. Unfortunately, I think the Fed will begin cutting rates much later than expected and will ultimately be forced to cut rates much lower than their projections. I believe this will be because of a very unhealthy economy and a continued weakening jobs market.
On paper, the unemployment rate is near historic lows, but it is anything but that. Even the most recent Bureau of Labor Statistics report from last Friday, which showed 216,000 jobs being created, has turned out to be misrepresented. In reality, December’s jobs report revealed that close to 700k people stopped looking for work and were therefore removed from statistical calculations. Experts revealed that a record 8.69 million people now hold multiple jobs and confirmed that since June, the economy has shed 1.5 million full-time workers and added 796,000 part-time workers.
Specific to the Jobs market, I have another radical prediction. Faced with job insecurity, more individuals will reevaluate their career paths, often leading to geographic moves seeking better opportunities or more fulfilling work. This shift will not just be about job availability but also about pursuing passions and craving work-life balance. I have partnered with a Career Coaching company to help those new to the workforce or those looking for a change optimize their opportunities. If you or your child needs help in this regard, don’t hesitate to reach out.
So, the Fed will cut rates. Then what? Borrowing costs will go down, and that will have a direct impact on home prices. Logic says that as rates go down, home prices will go up. That will be true in many areas, but again, geography will play a considerable factor. There will be some regions and states that might see a slowdown in home appreciation despite lower rates. It will be a very bifurcated market delineated county-by-county. Illegal migrants, politics, crime, and other such factors will play a vital part in the diversity of the housing market.
Regarding my theme of jobs and geography, I believe Aliyah to Israel will reach new historic highs. There are reports that there has already been a 400% increase in serious consideration for Aliyah since October 7th. It is estimated that over 5 million people will move to Israel over the next few years. Career considerations, housing, and finances are just a few of the essential factors that should begin getting addressed now. Once again, I am happy to help with these discussions as they are now a regular part of my consultations.
Indeed, it will be quite the year for most of us. Staying informed, adaptable, and strategically aware will be essential for individuals and businesses aiming to navigate what the wild year of 2024 will bring for your finances and future.
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected].
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