Thanks to hotter-than-expected inflation numbers last week, mortgage rates continued their climb to levels not seen in 14 years, according to Freddie Mac’s latest survey of average rates. Despite higher rates, buyers are still in the market for homes and inventory remains tight.
Remember, there are always various financing options available when it comes to buying your next home. The media likes to spell out all the doom and gloom, but there are still millions of homes being bought and sold in this country. Don’t let the rumors fool you! If you are considering a move, let’s take a look at the real numbers rather than relying on media spin. Reach out today! Simply reply to this email or text/call me at 818.307.6072.
This week, markets seem to be holding their breath and getting into position as the latest Fed Meeting convenes. For the bond market, which affects mortgage rates, this has meant that prices have risen and mortgage rates have had a bad couple of days, moving higher as traders expect harsh action by the Fed to combat inflation. And as inflation moves, so moves mortgage rates.
So, yes, we have a highly impactful Fed Announcement coming on Wednesday afternoon, however, there’s also been some interesting housing reports coming out this week.
On Monday the latest Housing Market Index, that measures the sentiment of the nation’s home builders was released. It came in far below the consensus range for the past two reports, at 49 in August following July’s 55 that was down 12 points from June. Has it hit bottom? Time will tell but September’s 46 was lower than the 48 expected. Anything under 50 signals contraction, or a poor outlook for homebuilders.
We also got a look at the latest report on New Housing Starts and Building Permits – a leading indicator of home inventory and sales. New construction starts popped up higher than expected showing an annual rate of 1.58 million in August, 12.2% higher than the revised July estimate of 1.4 million but 0.1% below the August 2021 rate.
The construction of multifamily units led the charge up 28.6 percent from July and 31 percent higher than a year ago! Single-family starts rose in August as well, up 3.4 percent from July but 14.6 percent lower than a year earlier.
On Wednesday, in addition to the Fed Announcement, we’ll get a look at the latest numbers for Existing Home Sales, which have fallen every month since February, and are expected to come in at an annualized rate of 4.7 million in August versus 4.81 million in July.
