First, let me start with an important announcement…for all newly originated second home and high balance mortgages the fees are going up substantially for all loans locked in after February 9th. So, if this might be you and you’re thinking of purchasing this year, please reach out to me right away so we can save you money on these fees!
Mortgage rates continued moving higher last week even as we await this week’s important Fed Meeting. The sentiment of the Fed members to begin using their policies to counteract inflation has caused rates to rise; however, this week out ahead of this meeting rates are holding steady for now.
The Fed Meeting began on Tuesday and will conclude Wednesday afternoon with an announcement and press conference, which will undoubtedly garner great attention as traders await the Fed’s plans for interest rate hikes and cutbacks on bond purchases.
Tuesday we also got a look at home price appreciation from two reports. The Case Shiller Home Price Index reported a more robust appreciation of 1.2 percent than the 1.0 percent expected bringing the annual rate to 18.3 percent appreciation.
The FHFA House Price Index showed another, expected, sizeable gain in home prices in November. According to the report, home prices increased 1.1 percent translating to a 17.5 percent annual price increase.
We’ll also see the latest numbers for New Home Sales. They have been volatile month to month but nevertheless trending higher. After a 744,000 annual rate in November, a 760,000 rate is expected for December.
Speaking of home sales, last week’s Existing Home Sales report revealed only 910,000 existing homes are on the market, which is considered tight inventory. Compare to 2007 (when there was an actual bubble) there were 3.7 million homes for sale!
Though falling 2.2 percent in November, the much anticipated leading indicator of home sales numbers, pending home sales, have nevertheless been trending higher. A 0.6 percent gain is expected for December.
On Friday we get a look at the Fed’s favorite inflation indicator, the PCE Index. As we know, markets are sensitive to high inflation readings. This particular inflation reading is expected to hold mostly steady at elevated monthly gains of 0.4 percent overall for annual rates of 5.8. If it’s greater than expected, it could kick off further volatility in rates, so I’ll be keeping an eye on it.
Until next time, have a great week, and reach out anytime for advice or support on your home financing!
