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MarketMinute | Is Now A Good Time To Buy A Home?

May 6
4:24
AM
Category | Markets in a Minute

  • The Fed raised policy rates 0.5% this week. The move will increase short term rates like car loans, some home equity loans, and credit card rates.
  • The Fed rate increase does not directly increase mortgage rates though. Mortgage rates moved higher already in anticipation of Fed action.
  • Concerns that intense labor demand could spark further wage increases has investors worried the Fed won't be able to curb inflation.

  • A recent Gallup survey showed just 30% of adults think now is a good time to buy a home, the first time it has been below 50% since 1978.
  • Total mortgage applications were up 2.5% last week. Though purchase applications were down 11% from last year, they were up 4% on the week.
  • 71% of homeowners with upcoming house projects expect to proceed despite anticipated higher costs, delays and materials shortages.

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MarketMinute | Are Bidding Wars Still A Thing?

Apr 29
6:18
AM
Category | Markets in a Minute

  • Factory orders for durable goods rose in March, pointing to sustained investment in business equipment that is helping drive economic growth.
  • GDP growth slowed to a 1.4% pace in the 1st qtr, an unexpected change for an economy coming off its best performance since 1984.
  • However, personal consumption, the biggest part of the economy, rose an annualized 2.7% in the 1st qtr, compared with 2.5% at the end of 2021.

  • Despite a drop in sales, new home demand remains strong. The number of new homes already sold and not yet started hit the highest level in a year.
  • Rising rates and prices are cooling buyer competition. 65% of homes received a competing bid in March, down 1.7% from February.
  • Pending home sales fell 4.1% in February from January. Although some blame rising mortgage rates, the more likely cause is lack of inventory.
 

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MarketMinute | What's the highest median existing home price ever?

Apr 22
3:29
AM
Category | Markets in a Minute

  • Fed members continue to signal they will take aggressive action to curb inflation, including hiking policy rates at their May meeting.
  • Claims for jobless benefits are at their lowest levels since the 1960s, highlighting a job market where demand for labor exceeds supply.
  • This week’s Fed survey, known as the Beige Book, found little evidence inflation will turn appreciably lower, not a good sign for rates.

 

  • Inflation and higher mortgage rates are taking their toll on the nation’s homebuilders. Builder confidence fell for the 4th straight month in April.
  • Housing starts rose unexpectedly in March, increasing 0.3%. However, starts for single-family housing tumbled amid rising mortgage rates.
  • The median price of an existing home sold in March was $375,300, a 15% year-over-year increase and the highest median price ever recorded.

 

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MarketMinute | How does current inventory compare to 2020?

Apr 15
12:23
PM
Category | Markets in a Minute

  • Surging food, energy, and shelter costs pushed consumer prices up 8.5% in March, slightly hotter than expected and the highest since 1981.
  • The prices that goods and services producers pay also rose. Wholesale inflation hit 11.2% in March, the biggest gain on record.
  • New unemployment applications remained near historically low levels, as employers held onto workers in a tight labor market.

  • Large investors have increased cash flow to devote to housing, having accumulated $89 billion for building or buying rental homes.
  • Housing inventory is up 8.3% since its seasonal low in March. Inventory remains 65.1% lower than the same week in 2020.
  • As fixed mortgage rates surge, applications for adjustable rate mortgages have increased and now make up 7.4% of total applications.

 

 
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MarketMinute | What's UP with rates?

Apr 8
4:42
AM
Category | Markets in a Minute

  • Minutes from last month's Fed meeting show a consensus to start reducing balance sheet holdings by $95 billion a month, to be announced in May.
  • Fed members also support multiple half point policy rate hikes this year. Along with balance sheet runoff, this supports higher mortgage rates.
  • Economic signals such as an inverted yield curve for long- and short-term Treasuries point to a possible recession to come in 2023.
 

  • Higher mortgage rates have pushed refinance applications down 41% from a year ago, but purchase apps were down just 9% due to tight inventory.
  • According to realtor.com, buyers are paying about 30% more for a house than they would have a year ago due to higher sales prices and rates.
  • Among home projects, a new home office and hardwood floor refinishing brought homeowners the most joy, a recent NAR/NARI survey found.

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