Market Minute - Economy and Housing News - Erin Carvelli

  • January's manufactured capital goods orders grew by the most in 5 months, ending 2 straight months of declines.
  • Consumer confidence declined in February, as rising prices and growing recession concerns outweighed the near-term strength of the economy.
  • The PCE, a key inflation measure, rose more than expected in January, indicating the Fed has more work to do to bring down prices.

  • Pending home sales jumped 8.1% in January, improving for the second straight month, as mortgage rates fell from 2022 highs.
  • The FHFA reported home prices advanced 6.6% in 2022, showing prices still increased, though at a slower rate.
  • Mortgage application volume was 44% lower than the same week one year ago and is now at a 28-year low due to higher rates in February. 

Market Minute Report - Mortgage News

It's true rising interest rates can make a big difference in your monthly mortgage payment. But interest rates are only one factor in the cost of financing a home. The market changes that typically come with rising rates can be beneficial and even help mitigate higher payments.

Low-Rate Environment vs. Average Rate Environment

Low-Rate Environment

In a low-rate environment, buyers are likely to rush to the market. That creates stiff competition, which can lead to a frenzy of bidding wars and rapidly rising prices.

Average Rate Environment

In a calmer environment, you’re less likely to compete against other buyers. You’re more likely to:

  • Have time to see and compare homes.

  • Negotiate on price.

  • Receive seller concessions, such as a credit towards closing costs or funds to reduce your rate.

  • Enjoy the safety of important contingencies like home inspections and mortgage financing.

  • Avoid making a rash decision you may regret later.

Low-Rate Environment vs Average Rate Environment

In fact, a lower price at a higher rate can be comparable to paying an inflated price at a lower rate. In other words, the real cost of a home today may be no different than it was when rates were lower, but competition was fierce and prices were at a premium.

Lower Price Higher Rates

If you’re comfortable making the payment you secure today, you can have peace of mind knowing your monthly cost will be even easier to make if you’re income rises. And if rates fall, refinancing can help you save even more.

History shows there’s one thing that rates don’t change about the housing market. It’s proven true whether mortgage rates were at their peak, at historic lows, or hovering around their average. Home values tend to rise over time.

We can’t predict the future as populations increase and the amount of buildable land stays the same, it’s likely values will keep going up over time. And when home values rise, homeowners gain equity and build wealth.

Bottom Line:

If you’re considering a move, don’t let rates hold you back. You may be surprised at the tools we have to help you reach your goals, no matter the market. A pre-approval at today’s rate is a great place to start. Reach out when you’re ready.

Market Minute - Economy and Housing News - Erin Carvelli

  • The New York Fed reports consumer debt hit a new record at the end of 2022, while delinquency rates rose for several types of loans.
  • Minutes from last month's Fed meeting showed most officials supported a quarter point hike though "a few” favored a bigger half point hike.
  • Fed officials stated the signs of slowing inflation are not enough to counter the need for more interest rate increases.

  • Existing home sales dropped to the lowest level in more than 12 years in January. The pace of decline slowed, though, raising optimism for a shift.
  • Home purchase applications tumbled last week to the lowest level since 1995, as the highest mortgage rates in 3 months discouraged buyers.
  • Some good news for first-time and low-income buyers: The FHA announced cuts to its mortgage insurance premiums starting March 20. 

Market Minute Report - Mortgage News


No need to back away from reverse mortgages!

Reverse mortgages have grown up in recent years. Our clients aged 62 and older most often use them as a safe option in two instances: 

  • They have accumulated much of their wealth in their home and would like to access equity without selling.
  • They want to purchase a new home without making a monthly principal and interest payment or touching other investments.

Plus, if clients want to pass the home down to their children, it can stay in the family. Heirs pay the amount owed or 95% of the home's appraised value, whichever is less.

Click here to learn more about Reverse Mortgage and Reverse Mortgages for Home Purchase.

Reverse Mortgage Resources:

Questions? Want to see if you qualify? Reach out to the Greenway Team today. 

Contact Erin Carvelli

Market Minute - Economy and Housing News - Erin Carvelli

  • The inflation rate dropped slightly in January but came in higher than expected. Core inflation without energy and food was up slightly.
  • Retail sales jumped 3% in January, smashing expectations. No categories saw a decline, following a December in which sales fell 1.1%.
  • Forecasts for future Fed rate hikes have increased on the stronger economic data, with rate hikes now expected through June.

  • NAHB’s Homebuilder Sentiment Index improved in February by the largest amount in a decade due to an uptick in demand.
  • New home construction retreated for a 5th straight month in January, reaching the lowest level since June 2020. Building permits also fell.
  • Though some home prices are retreating slightly, the NAR reports the typical home price has risen 42% in the past 3 years. 

Market Minute Report - Mortgage News

Showing results 16 - 20 of 730