Volatility reigned last week, leaving mortgage rates higher once again, according to the weekly survey of average mortgage rates put out by Freddie Mac. Even though rates have been bouncing around, data continues to show that the housing market continues to move to a more balanced environment. Declines in demand for home purchases continue to slow the rapid increase in home prices and create more opportunities for the buyers in the market.
So, if you are planning to purchase a home in the near future, let’s put a plan together for you. Opportunities for buyers on both the financing side and on the supply side are increasing!
However, we learned on Monday that the nation’s home builders are more pessimistic about the housing market than we thought they’d be. The Housing Market Index that measures the sentiment of the nation’s home builders dipped into contraction territory dropping to 49 when 55 was expected.
On the heels of the Housing Market Index came the leading indicator report, Housing Starts and Permits. Housing starts in July slowed by 10 percent, down more than the 2.5 percent decline expected. This makes an 8 percent decline for the year. Even single-family starts were down 10 percent, which will contribute to inventory remaining tight for buyers. Likewise, Housing Permits – our future supply – was down one percent.
We’ll also get a look this week at the latest sales figures from Retail Sales. Inflation is distorting retail sales which nevertheless were upbeat in June, rising 1.0 percent both at the headline level and excluding vehicles. July’s expectations are flat, at a 0.1 percent rise overall and a 0.1 percent dip excluding vehicles. Excluding both vehicles and gasoline, sales are predicted still to be up 0.3 percent following June’s 0.7 percent rise.
As for housing data later in the week, we’ll get a look at Existing Home Sales numbers. Sales are expected to fall to an annualized rate of 4.85 million in July versus 5.12 million in June. Sales have fallen every month since February, showing a 14.2 percent drop in sales numbers for the year, yet prices have continued to climb.
Rates look to be steadying this week moving in a narrow range so far, however, I don’t doubt volatility can step in at any time.
I’ll be watching how the data affects movement as the week goes on.
