Yes, it’s been a bit of a bumpy road, but mortgage rates continued their trend lower last week, with the average rate for the 30-year mortgage even with the prior report, according to Freddie Mac’s weekly survey.
Sam Khater, Freddie Mac’s chief economist commented that “The sound and fury of the financial markets continue to warn of an impending recession, however, the silver lining is mortgage demand reached a three-year high this week. The decline in mortgage rates over the last month is causing a spike in refinancing activity… which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up seven percent from a year ago.”
What’s important to remember when we hear all the chatter in the media about recession is that first, recessions are cyclical and happen regularly, they historically last about 6-12 months.
Second, the housing market generally does quite well during recessions and mortgage rates tend to go down. So, it’s not uncommon to see the rate of homeownership rising during recession. It’s a great opportunity for first-time buyers to take advantage of low rates and trade renting for homeownership.
As for this week, there’s not much economic data expected so much of the focus will be on technical signals for markets such as the 10-year Treasury yield which we expect will be bouncing around a bit as mortgage rates continue to flirt with historic lows.
We will get some housing market news as numbers for Existing Home Sales and New Home Sales come out this week. We’ll keep you updated!
Finally this week, a major economic conference gets underway Friday in Jackson Hole, Wyoming. Many Fed members will be there and speaking, including Jerome Powell. We’re sure to see lots of headlines coming out of those meetings.