We’re going on two months now that we’ve seen mortgage rates remain mostly flat. Analysts see this as evidence that markets are leery of the prospects of a robust economy roaring back anytime soon due to rising covid cases and how this pandemic is going to shake out. And of course the Fed’s bond buying program is helping rates stay low…more on that in a moment.
It’s also interesting to consider how many of the fundamental changes in our economy, due to the pandemic, such as remote work, migration away from large cities, and increased use of automation will affect our economy and housing in the long run. Keep this in mind as you think about your housing plans going forward.
As for now, we’re watching lots of housing data being released this week, along with an important Fed Meeting. And speaking of the Fed, their meeting gets underway on Tuesday. There’s lots of speculation that they could be discussing and planning tapering their bond buying program, which if that’s the case, could cause volatility in mortgage rates this week, depending on what Fed Chairman Powell says in his remarks on Wednesday.
On Monday we got a look at the Housing Market Index, a measure of the sentiment of the nation’s homebuilders. The housing market index fell very abruptly in August, to 75 where it was expected to hold in September. The actual reading was slightly higher at 76 continuing to point to homebuilders’ concern over labor shortages and supply chain troubles.
The housing market’s leading indicator – New Housing Starts and Permits – surprised the consensus coming in higher than expected at 1.615 million for Starts and 1.728 million for Permits.
Rolling along with housing data, we get the numbers for Existing Home Sales on Wednesday. Existing home sales rebounded strongly to a 5.990 million annual rate and back toward the 6-million-plus rates early in the year. The consensus for August is a 5.900 annual rate.
The numbers for New Home Sales come out on Friday. Sales of new homes have slowed but held quite strong in July, at an annual pace of 708,000. Sales for August are seen holding at the 708,000 rate.
The next major move for mortgage rates likely has lots to do with what happens at this week’s Fed Meeting. I’ll be keeping an eye on it all and report back. In the meantime, if you’ve been waiting to lock in your refinance or next purchase, now could be the time to jump in before rates start to rise. Give me a call or text and let’s review your scenario!