Once again, it’s been an interesting week as last Friday we saw mortgage rates hit their lowest levels in over 6 weeks as investors continued to brace themselves for bad news in the banking sector. Uncertainty like this draws investment funds out of the stock market into the bond market, which in turn can help mortgage rates improve.
With fears lessening this week after a weekend without banking drama, investment funds are moving back in the other direction and we’ve seen rates tick higher this week.
As for the housing market, the week’s data is showing improved demand for home purchases, and home prices continue to stabilize. Spring has officially arrived so traditionally we see homebuyer activity step up and if we see rates improve you can almost bet on a new bump in home sales. Time will tell!
And interestingly, a report released by the National Association of Realtors says that Millennials are no longer the largest segment of homebuyers. Older buyers, ages 43 and older, make up almost two-thirds of homebuyers. Plus, close to 1 in 4 of all buyers is a cash buyer and therefore impervious to mortgage rate fluctuations.
If you want to get a jump on the competition for homes this peak season, let’s create a plan for you sooner rather than later. Call, text, or reply to this email and let’s talk!
What I’m watching this week…
The latest data on home price appreciation came out this week from two sources. The Case-Shiller Home Price Index reported home prices rising just 2.5 percent, much less than the 3.7 percent predicted, for the year in January versus December’s 4.6 percent.
The FHFA House Price Index reported prices have flattened out, coming in marginally changed to unchanged in the last four reports. January’s number is a monthly increase of 0.2 percent and a 5.3 percent increase in home prices for the year.
Pending home sales in February are expected to rise 1.0 percent on top of January’s 8.1 percent surge.
The final report on Q3 GDP (gross domestic product) is expected to hold at 2.7 percent growth, again showing that we ended 2022 with positive economic growth.
Friday we get a look at the Fed’s favorite inflation reading, the PCE Index. As we know inflation is a hot-button issue in the markets and anything unexpected here could spark more volatility. Inflation readings for February are expected to show that inflation remains persistent at monthly increases of 0.4 percent both overall and for the core (versus 0.6 percent increases for both in January) for annual rates of 5.1 and 4.7 percent (versus January’s respective rates of 5.4 and 4.7 percent).
I’ll keep an eye on all of it and report back. Have a great week!
