I hope your week is going well! Rates have been the talk of the town, so let me share what is behind the headlines and where the opportunities are hiding.
Here’s where rates stand: Freddie Mac’s weekly average jumped about a quarter of a percent last week, putting it nearly a full percentage point above where it was a year ago, and daily rates are near their highest levels in years. The surprise is that this is not an oil story, since oil has actually pulled back. Instead, bond yields are climbing worldwide, in Japan and the UK as well as here, and the 10-year Treasury, the benchmark mortgage rates follow, reached its highest level since 2002. Even good economic news is adding pressure, because strong growth gives the Fed less reason to ease.
A little relief arrived on Friday: The September jobs report was soft, with just 29,000 jobs added and the prior two months revised lower. Treasury yields dipped, and mortgage rates slipped to near one-week lows on Tuesday. It is too soon to call that a trend, and a slower job market can make some buyers hesitate. That is why I watch the numbers, not just the headlines.
For buyers, leverage keeps growing: About one in five home listings took a price cut in September, the highest share in nearly four years. Inventory is up, buyer demand has cooled, and sellers are staying put rather than pulling their homes off the market. Translation: more room to ask for seller credits, closing cost help, and rate buydowns, not just a lower price.
For move-up buyers, a longer-term bright spot:Realtor.com projects older homeowners will release nearly 14 million homes over the next decade, and most will be three- and four-bedroom family homes. Starter homes will stay scarce, but if you have been dreaming of trading up, more choices are on the way.
My best tip: if your preapproval is a few weeks old, or a higher payment puts your plans on pause, let’s rerun your numbers. Even a small move in rates can change your buying power, and I would rather you know than guess.
I invite you to call or text me at 818.307.6072 or simply send me an email. Referral partners, I’m always happy to run numbers for your clients
