Luckily for the summer home-buying frenzy, mortgage rates have continued to decline. In fact, according to Freddie Mac’s weekly survey of average rates, since their peak in April, mortgage rates have declined by .30 percent. Not bad!
But how long will this last? It’s an interesting question because many market experts believe rates are remaining artificially low thanks to all the bond buying that the Fed is doing to help support the recovery of the post-pandemic economy. Fed Chair Jerome Powell testified last week that even though inflation is rising there are no plans by the Fed to taper off their bond buying.
However, there is speculation that all the bond buying could taper off come September, when the pandemic employment benefits taper off, the economy gets a boost from pent up demand and inflation continues to rise. Historically we’ve seen that kind of tapering causing rates to rise.
What this means for you is that if you would still like to refinance or purchase this year, sooner is likely better than later. Call/text me at 818.307.6072 or simply reply to this email and we can discuss your options.
What I’m watching this week…
There’s a good dose of housing data coming out this week beginning with Monday’s Housing Market Index, which tracks the sentiment of Home Builders. The index was expected to come in at 82 and was 2 points lower at 80 signaling home builders are slightly less optimistic about the housing market than they were last month. Not a huge deal but something to keep an eye on.
Tuesday the leading indicator for the housing market, Housing Starts and Building Permits, was released. Sharp gains were expected but underestimated as new housing starts rose to 1.64 million. Permits however did not rise to the 1.70 million level comin in at 1.59 million.
Finally Thursday we get a look at Existing Home Sales numbers. Thanks to tight inventory levels, they have been slowing, yet even though falling 0.9 percent in May to a 5.800 million annual rate, they still beat expectations. The consensus for June is a 5.900 annual rate.
I’ll be keeping an eye on all of it for you and will report back next week. In the meantime, feel free to reach out.