Rates took a breather from their climb last week and according to the latest survey of average mortgage rates published by Freddie Mac, leveled off and have been holding mostly steady. Freddie Mac also reported declining demand for homes due to higher rates and declining homebuilder confidence. All points to further evidence of the shifts happening in the housing market.
Another shift we’re seeing are more options for borrowers to help make home purchases more affordable. One program I love is the 2/1 buydown program. This option lowers the interest rate paid by the borrower by 2 percent for the first year of the loan and 1 percent for the second year. The expectation is that we’re able to refinance to a lower rate in the next couple of years. This buydown of the interest rate is an option that’s built into the purchase as a seller credit.
There are other programs that I’m seeing come out for first-time homebuyers too, so if you are considering a purchase, please reach out to me and let’s explore all of your options. Yes, rates are higher than they were a year ago, but we always have lots of options we can consider to help you get into the home that best suits you.
What I’m watching this week…
The Case-Shiller Home Price Index reported a slight drop in annual home appreciation rates from 15 percent down to 13 percent per year. Miami, Tampa, Florida, and Charlotte, NC saw the greatest gains in home price appreciation.
The latest number for New Home Sales comes out mid-week and after a 685,000 annualized rate, an upside surprise in August, September’s expected sales number is a much slower 585,000 rate.
Later in the week, third-quarter GDP is expected to accelerate to 2.3 percent annualized growth versus second-quarter contraction of 0.6 percent. If this expectation is met, talk of recession may quiet down.
On Friday we’ll get a look at the Fed’s favorite inflation indicator, the PCE Index. Current predictions are that inflation readings for September will show inflation remaining elevated with monthly gains of 0.3 overall and for annual rates of 6.3 overall (versus August’s 0.3 and 4.9 percent).
Lastly, on Friday we get a look into the home sales coming down the line with the pending home sales index. Not surprisingly, pending home sales are expected to fall 3.8 percent in September. Pending sales have fallen in all but one month this year.
I’ll be keeping an eye on all of it for you and report back next week!
