I hope your week is going well! This one has had some drama in the markets, so let me walk you through what happened and what it means for you.
Here’s Where Rates Stand
Freddie Mac’s weekly average rose about a tenth of a percent last week, its highest level in at least a year and roughly a full point above where it was a year ago. Early this week, daily rates slid to two-week lows. Then Wednesday’s inflation report came in hotter than expected, with core prices (which strip out food and energy) rising about 0.3 percent against a 0.2 percent forecast. Mortgage rates started the day sharply higher. But stocks sold off hard, investors moved money into bonds, and by the end of the day lenders were right back where they started. One headline rarely tells the whole story.
Why the Fed Matters Here
The Fed doesn’t set mortgage rates, but what markets expect it to do moves them. Before this week, odds of another hike at the October 27-28 meeting looked low, and Wednesday’s report undid much of the recent easing in those expectations. Pressure from overseas bond markets, especially France, is still in the mix too, though solid demand at last week’s Treasury auction helped steady things. Producer prices arrive Thursday, so more clues are coming.
For Buyers, Leverage is at a Record
Redfin reports sellers outnumbered buyers by about 63 percent in September, the widest gap in its records and the fourth straight month of new highs. About 60 percent of homes sold below their original asking price, and nearly one in five listings had a price cut.
A Word of Caution
Redfin calls this a buyer’s market born of caution, not strength. Pending sales hit their lowest level since 2014, outside the 2020 shutdown, and canceled contracts are the highest since early 2020. Existing-home sales edged up 1.5 percent in September, but the National Association of Realtors says higher rates mean fewer buyers can qualify.
My Best Tip
Use the leverage wisely. Ask for seller-paid closing costs or a rate buydown, not just a lower price. If a builder offers a year-end incentive, let’s compare the full picture, including your payment once a temporary buydown ends. And with more deals falling through, a fresh, strong preapproval makes your offer more appealing.
I invite you to call or text me at 818.307.6072 or simply send me an email. I’m always happy to discuss scenarios and run numbers for you.
