Last week mortgage rates had their best week in terms of improvement since early March, which offered a breather from rising rates and opportunities to lock in slightly lower rates. The catch is that overall for March, rates are at their highest levels since 2018.
This week’s rates have continued their move higher making it look like last week’s technical improvement may have been short-lived. In fact, according to Freddie Mac’s weekly survey of average rates, the average 30-year fixed-rate mortgage surpassed 4.5 percent and kept on going.
Despite not as favorable economic conditions, the housing market remains strong though as the demand for homes continues to outpace expectations and supply remains tight. We’re seeing demand weaken slightly but there are plenty of first-time homebuyers ready to step into the market and buy homes as they come on the market.
This week there are few high-impact economic reports coming out. The most important release of the week comes on Wednesday when the Fed Meeting Minutes from 3 weeks ago will be released. These are likely to give traders a clearer picture of what the Fed is planning as it moves ahead to use its policies to help combat rising inflation.
As we know, markets like certainty, so the more details that come out about the Fed’s plans, the more likely we are to see reduced volatility and even improvement. Still, uncertainty remains around rising inflation, how to tame it, and whether Fed policy will go too far and send the economy into recession.
According to some of the latest numbers coming out of the housing market, it looks like housing prices may be moderating a bit. Data released this week from Redfin indicates that the median listing price of homes in the US has slowed slightly to 15 percent year over year, down from 16 percent. We’ll be watching how these numbers show up in other reports.
Housing inventory continues to be tight, according to Redfin’s report, with just 475,800 homes on the market – the fifth-lowest in history. So, yes, we always hate to see mortgage rates rising, however, this could be a good time for home-buyers to start to see the pendulum swing back in their favor, as far as home prices and inventory. We’ll have to wait and see as the Spring Home Buying season begins.
As for now, if you are considering a purchase, reach out sooner rather than later and I can be watching rates for you and lock you in when we have these improvements.
