We Haven’t Seen This in Over a Decade!

These are interesting times in the housing market and we’re seeing lots of speculation around what it all means and how it’s all going to shake out. According to Freddie Mac’s weekly survey of average rates, the average for a 30-year fixed mortgage has now officially hit 5.0 percent on the survey, a level not seen in over a decade.

As we know, rising rates coupled with higher inflation, rising home prices and tight inventory will make for some interesting transitions for housing. We are beginning to see signs that housing demand is beginning to temper; however supply will continue to be an issue for likely years to come. 

The experts I follow are predicting that home price appreciation will not be as crazy as it has been, which is good news for would-be buyers wanting to get into the market. And yes, rates have gone up and will likely continue to go up; however, remember, if you are considering buying, the rate is not as much of a limiting factor because we can always consider refinancing when rates improve. Reach out to me and let’s run the numbers so you can see.

So, what am I watching this week that will be moving markets and affecting rates?

First up this week was the Housing Market Index, a measure of sentiment among the nation’s homebuilders. The index has been sagging, down 2 points in March to 79 with 78 expected for April and it came in even a little lower at 77, which is not surprising, considering inflation and rising mortgage rates. 

Next up for housing was a leading indicator for the sector, New Housing Starts and Building Permits. A small step back to a 1.750 million annual rate was expected for March starts following February’s pent-up surge to 1.769 million. The surge continued with 1.79 million new starts and same for Permits, up to 1.87 million from 1.865 million last month.

The final report out of the housing market this week is the numbers for Existing Home Sales. Resales fell very sharply and much more than expected in February, the effect of climbing mortgage rates. After February’s 6.02 million annual rate, a further decline to 5.86 million is expected for March.

We’ll also have quite a few Fed speakers out and about this week, which considering the Fed’s policy changes and continuingly stubborn inflation rates, will attract the attention of traders and could cause some market movement based on what they’re saying.

I’ll be keeping an eye on all of it and reporting back next week. In the meantime, please reach out if I can advise or help you with any home financing or refinancing in both California and Colorado.