Believe it or not, I actually have some good news to report when it comes to inflation and mortgage rates. First, mortgage rates improved a little last week, according to the latest survey of average mortgage rates reported by Freddie Mac. Now, as we know rates can be volatile and I don’t believe this is a sustainable improvement; however, I point it out because there are opportunities that arise to lock in more favorable rates, so if you know you’re making a move or looking to purchase sometime in the near future, let’s come up with a plan to get you the best rate possible.
The other piece of good news is that according to the latest inflation data and analysis by Freddie Mac’s lead economist, it appears that inflation may have peaked and we’re on the downside of that trend. Fingers crossed!
As for the housing market, the effects of inflation and higher rates are likely to play out for the remainder of this year as we see home supply increase and home price growth slow, which is good news for buyers.
One area of the housing market that has shown to be especially resilient to the gyrations of rates is the single-family home investor market. Over 50% of single-family home rentals are owned by individual investors with small portfolios. Did you know that if you are one or want to be one of those investors, I can help you finance the purchase of an investment home? If this is something you’re interested in exploring, reach out to me! Simply reply to this email or call/text me at 818.307.6072.
What I’m watching this week…
First up, we got the latest numbers for New Home Sales. After June’s much lower than expected 590,000 annualized rate and a sharply downward revised 642,000 in May, sales of new homes were expected to fall further to 575,000 in July, but they actually fell much further than expected, to 511,000.
Interestingly, Wednesday we get a look at Pending Home Sales, which gives a peek into what home sales numbers will be in the coming months. Pending home sales are expected to fall 2.5 percent in July. This report has missed expectations in all but one month so far this year and missed especially badly in June at minus 8.6 percent.
Friday we could see some increased volatility in rates and the markets at large as the Fed’s favorite inflation indicator will be released and just as the Fed members are meeting for their annual retreat in Jackson Hole, Wyoming. And, on Friday, Chair Jerome Powell will be making public remarks, which grab lots of attention.
As for the inflation numbers expected, readings all exceeded expectations in June and for July are expected at monthly gains of only 0.1 percent overall and 0.3 percent for the core (versus 1.0 and 0.6 percent respectively) for annual rates of 6.3 and 1.7 percent (versus June’s 6.8 and 4.8 percent). If the estimates are accurate, this could be the next round of data showing that we’re on the other side of the peak of inflation.
I’ll be keeping an eye on all of it for you!
