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October Market Update

Israel Conflict

The recent events that unfolded in the Middle East are heartbreaking, and both sides have signaled their unwillingness to back down. Many analysts are predicting that if Israel decides to invade the Gaza Strip, the conflict would likely be months if not years, without Israel being able to accomplish their objective. If this does happen, we are likely to see increased attacks on US forces in the region, and the increased potential for the conflict to spread.

While the consequences are unknown, the obvious repercussions could be the manipulation of oil supplies. Saudi Arabia, Iraq, and Russia are the major oil producers in the area and account for a significant percentage of oil shipped around the globe. These countries, along with OPEC could restrict oil output, or manipulate the price by other means. Unfortinatley, the US is a net crude oil importer, meaning we consume more than we produce. If the global price of oil increases, we would still need to pay those higher prices for oil, even for the oil we produce in the US. A counter point to higher oil prices could be the onset of a recession, which would lower demand, potentially offsetting any price manipulation attempts.

Mortgage Rates

Meanwhile, mortgage interest rates hit a national average of 8% this month, a level not seen since 2000. This is causing some buyers to hit the pause button in their search for a new home. Lower demand is leading to an increased supply of unsold houses, which explains why almost 40% of homes have had their listing price reduced. Housing is closely tied to consumer confidence, and so far prices have remained somewhat steady. Currently many industry analysts including Zillow and the Mortgage Bankers Association, are forecasting small, but positive home price growth over the next 12-24 months.

As always, if you have any questions please do not hesitate to give us a call!

Citrus Wealth Management

O: 909.312.4412 // F: 909.312.4441

1461 Ford Street, Suite 103, Redlands, CA 92373

Any opinions are those of Citrus Wealth Management and not necessarily those of Raymond James. The information contained in this email does not purport to be a complete description of the securities, markets, or developments referred to in this material nor is it a recommendation. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results.

Raymond James is not affiliated with Zillow or the Mortgage Bankers Association.


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