Well, all signs are pointing up this week and last, so mortgage rates have behaved accordingly. For the second week in a row, the trend for rates has been upward, according to Freddie Mac’s weekly survey of average 30-year and 15-year conventional mortgages. It’s kinda a double-edged sword of good news, and bad news because the economy is showing signs of resilience (good news), mainly due to consumer spending (good news), which is leading to higher inflation (bad news) and pressuring mortgage rates higher (bad news).
This is the delicate balance we play in the economy and the Fed has been trying to maintain the balance by raising its Fed Funds Rate, which can cause issues of its own, which is a long story and an article in itself. Anyhoo, for this week, rates for the average 30-year fixed have popped up slightly by .20 percent according to Freddie Mac’s latest survey.
As for the housing market, we saw the latest sales numbers for Existing Home Sales, which for December showed another drop, by 0.7 percent. Remember, however, that during December rates paused their trend of improvement for a couple of weeks. We’ve also seen Existing Home Sales continue to drop because there are simply fewer homes coming on the market.
I believe the demand is present, but the home sellers are few, so there remains lots of pent up demand. We know that because the total inventory is still quite low at a 2.9 month supply.
What does this mean for YOU? If you’re considering buying a home this year, let’s talk and come up with a plan for you regarding your financing, what your goals are, etc. so when the right opportunity comes up, you can take advantage of it. Reach out by replying to this email or call/text me at 818.307.6072.
According to the National Association of Realtors analysis of the Existing Home Sales numbers, “Inventory remains low, but buyers are beginning to have better negotiating power,” says NAR Chief Economist Lawrence Yun. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.” Of course, this is dependent on local market conditions, but opportunities are becoming more available.
I’ll also be watching the report on New Home Sales coming out on Friday. This number, which has been depressed, is expected to hold steady for January, at a 617,000 annualized rate versus 616,000 in December.
And finally, the Fed’s favorite inflation report comes out on Friday. The PCE Index will be closely watched as analysts continue to look for signs that we’ve topped out on inflation. Predictions are that inflation readings for January are expected at monthly gains of 0.4 percent overall versus an increase of 0.1 in the last report. For annual rates, we’re expecting 4.9 versus December’s 5.0.
