The big story since last week’s update has been inflation. With the economy reopening and the demand for goods and services increasing over these last few months, prices (thus inflation) have been rising. This also means that prices for mortgages – in the form of the interest rate – may rise as well.
This is what Sam Khater, Freddie Mac’s chief economist had to say, “…the low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer.”
Fortunately for you if you are buying or refinancing now rates have remained rather steady; however we foresee rates ticking a little higher over the summer and into the fall.
Once the supply and demand issues across the globe due to the pandemic begin to work themselves out later in the year, we do foresee inflation subsiding and even the supply and demand issues in the housing market working themselves out. Wouldn’t that be nice!?
What I’m watching this week…
As for this week, we’ve got some important pieces of data coming out of the housing market but not much else as for economic reports that will be market movers.
First up on Tuesday was the report on new housing starts and building permits, a leading indicator for new home construction. Vaccinations, stimulus checks, and the spring season are all positives for residential construction. We saw 1.569 million new home starts for April versus March’s 1.739 million while permits came in at 1.760 million versus 1.759 million in March.
On Friday, we get a look at the sales numbers for Existing Homes. April’s expectations call for a bounce higher to a 6.085 million annual sales pace versus what was a lower-than-expected 6.010 million rate in March, a month held back by a rise in mortgage rates and supply issues.
If you have yet to refinance or are considering a purchase, let’s chat soon and go over all of your options. You can simply reply to this email or text/call me at: 818.307.6072.