Shifting Continues in Housing + Jobs Report Friday

Mortgage rate volatility is still a thing as we saw rates whipsaw higher last week. Average rates as reported by Freddie Mac’s weekly survey showed a .42 percent increase for the 30-year fixed and .30 percent rise for the 15-year, which is a greater than typical move in rates. 

The data coming in continues to show a changing housing market that is moving toward a more balanced environment for both buyers and sellers. As recently as February we saw 82 percent of home sales going under contract at or above the asking price. Now it’s closer to 69 percent. 

We’re also seeing 92% of sellers making concessions such as dropping prices, helping with closing costs, or paying for repairs, which is typical in a more balanced market. There are also indications that inventory levels are improving as the latest numbers show closer to 9 months of inventory on the market.

What does all this mean for you?? If you’ve been waiting on the sidelines to buy, now is a great time to consider a purchase. Even if rates are higher than you’d like, we can always keep an eye on them and consider a refinance when they come back down. And if they don’t come down, you’ll be glad you got in when you did! Reach out to me if you’d like to explore your options! You can reply to this email or text/call me at 818.307.6072.

As for what I’m watching this week…

The latest home appreciation figures came out. Case-Shiller data have been flattening but at extremely elevated levels. The monthly growth rate missed expectations of 1.1 percent in June, coming in at 0.4 percent. However, although slightly lower, the annual appreciation remains elevated at 18.6 percent.

Since June 2020 – the beginning of the great pandemic housing boom — FHFA’s house price index has posted monthly gains of 1 percent or more each and every month. Yet this indicator appears to be leveling, slowing in May to a monthly 1.4 percent with a much slower 0.1 percent in June and year-over-year coming down from 18.3 percent to 16.2 percent…still a pretty nice return on investment.

The week’s housing data gives way to the monthly employment data starting on Wednesday with ADP’s report on private sector job creation. ADP’s report is expected to show an August estimate of 225,000 for private sector job growth.

Following, on Friday we get the government’s jobs report. A 293,000 rise is the general consensus for new job growth in August which would compare with a far greater-than-expected 528,000 rise in July. 

As for wage inflation, average hourly earnings in July rose 0.5 percent on the month and 5.2 percent over the year, both of which were also greater than expected. Earnings in August are expected to rise 0.4 percent on the month and 5.3 percent once again on the year. Surprises in wage inflation could certainly cause increased movement in mortgage rates which typically rise with inflation.

I’ll keep an eye on all of it and see you next week!