Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Current Rates -
30 Year Conventional - Mid 6's
15 Year Conventional - Mid 5's
30 Year Jumbo - Low 6's
30 Year FHA - Low 6's
30 Year VA - High 5's
A string of recent signs of softness in economic data and corporate earnings guidance have led to a risk-off appetite in the markets, sending equities lower, bond prices higher, and mortgage rates down to levels not seen since December 10, 2024. If the new administration gets their wish, borrowing costs will continue to decline going forward. That’s good news for the mortgage industry when it comes to rates. You can see this reflected in the drop of the 10 Year Treasury.
What's Driving Rates Down Is Not Usually Good for the Economy as Seen Here -
A Bifurcated Economy Heightens Affordability Issue -
Moody’s Analytics recently published showing the bifurcation that is expanding in our current economy around consumer spending and savings. The report reveals that lower-income households have become exhausted by high prices and stubborn inflation, while the top 10% of earners - households making about $250,000 a year or more - are splurging, buoyed by big gains in stocks, real estate and other assets.
In layman's terms we are looking at the classic "Haves vs The Have Nots" or as I heard the other day "The Have Yachts vs The Have Nots". This issue in my opinion is creating the "home-affordability issue" especially for "First-Time Homebuyers." While the upper income earners can afford to buy homes, you need all segments to be in the same position.
Here's why - you need "First-Time Homebuyers" to be able to afford to buy the home of the "Move Up Buyers" to unlock the equity for the "Move Up Buyers" to buy a new home. In addition, most "Move-Up Buyers" can't afford to carry two mortgages. Thus, if you don't have a large segment of people that can buy their homes as "First Time Homebuyers" it all starts to somewhat cave-in. Fewer buyers typically leads to lower sales prices as well.
See this graph of Housing Affordability -
Spring Housing Buying Season Kicks of With Lower Rates and More Inventory -
If you are looking to buy a home this Spring you have two things working in your favor - lower recent rates and more homes from which to choose.
“Mortgage rates decreased to their lowest level in over two months,” Freddie Mac’s Chief Economist Sam Khater said in a statement. “The drop in mortgage rates, combined with modestly improving [housing] inventory, is an encouraging sign for consumers in the market to buy a home.”
This spring, buyers may face a friendlier housing market.
Home prices remain high, but even small drops in rates can boost the buying power of home shoppers. A drop in rates can also result in smaller monthly mortgage payments.
“Lower rates could give the housing market the shot in the arm that it so desperately needs,” Lisa Sturtevant, chief economist of Bright MLS, said in a statement. The multiple listing service covers the mid-Atlantic region.
In addition, buyers are finding more homes on the market to choose from. The number of home listings was up 27.5% year-over-year in February, according to Realtor.com data.
That’s allowing buyers to be choosier—and leading to more sellers cutting prices to be competitive. The number of price reductions increased 30.2% year-over-year in February, according to Realtor.com data.
Those savings, in addition to lower mortgage rates, may help buyers stretch their budgets.
“It seems likely that rates will fall in the weeks ahead, though they are not expected to come down significantly,” Sturtevant said. “Consumers should accept rates that are volatile week-to-week, but that are gradually moving lower.”
As I have been saying real estate is returning to being "Local". That means while home prices may be lower in some areas, they could be higher or rising in other areas. We continue to move away from a "National - Everything Moves Together" housing market.
Typically If You Follow Inflation You Know the Direction of Interest Rates
Great Time to Rent an Apartment -
There are many reasons to rent an apartment in life - I'm not a Home-Ownership "Maximalist". Just got out of college, short-term assignment, just got divorced, lots of reasons. If you are someone that apartment living is the best-current situation for you - than you should be very happy.
All those apartment complexes that they built and are still building - well maybe they overshot their projections. Now with so many units they have to compete for clients with "Move-In Specials", usually in the currency of "Free Rent". For example, here is a complex offering 3 months of free rent.
I checked around some of the Austin and Houston area apartment complexes and it is happening here as well. Hey saving 3 months rent is a great way to start a savings fund for a future down-payment when you are ready to buy a home.
Final Thoughts -
Like the Texas Baseball team - let's hope lower rates continue their streak. Great to see Texas at 8-1 and put Texas Tech in their place.
Any race NASCAR Fans on OB - I'll be out at the Circuit of the Americas cheering on my company's #47 - thanks to my regional manager for hooking me up with the Race Team for VIP Pit Passes. Heading out there now.
Fast Cars & Fast Closings/High Speeds & Low Rates with a Winning Team!
Always here to answer question ITT or send me a DM.
Also if there are any topics you would like addressed in an upcoming "Weekly Housing & Real Estate Market Thread" let me know.
Hook Em!
MH
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Current Rates -
30 Year Conventional - Mid 6's
15 Year Conventional - Mid 5's
30 Year Jumbo - Low 6's
30 Year FHA - Low 6's
30 Year VA - High 5's
A string of recent signs of softness in economic data and corporate earnings guidance have led to a risk-off appetite in the markets, sending equities lower, bond prices higher, and mortgage rates down to levels not seen since December 10, 2024. If the new administration gets their wish, borrowing costs will continue to decline going forward. That’s good news for the mortgage industry when it comes to rates. You can see this reflected in the drop of the 10 Year Treasury.
What's Driving Rates Down Is Not Usually Good for the Economy as Seen Here -
- Yields have round-trip in the 10-year period from election day to now, as we sit around the 4.28% mark. The bad news is good news for mortgage rates is finally starting to return to once again with 30-year fixed rates falling to 6.79%, below election day readings of 7.04%.
- Retail sales slumped 0.9% in January, down much more than expected.
- Housing starts tumbled -9.8% in January from December, representing the largest monthly decline in 10 months and a 0.7% decline compared to one year ago.
- Consumer sentiment plunged in February to a 15-month low.
- The top 10% of earners - households making about $250,000 a year or more - are splurging, buoyed by big gains in stocks, real estate and other assets. Those consumers now account for 49.7% of all spending.
- Existing and new home sales dropped, surprising markets to the downside, while months’ supply rose, and home prices continued to rise on an annual basis, with both hitting their highest median prices ever for January ($397K for existing and $446K for new).
- The latest pending home sales index plunged to a record low in January (the index goes back to 2001).
- Home affordability remains near historic lows. A family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.
- Initial jobless claims rose more than expected last week as 242,000 people filed for benefits, that’s 22,000 more than the week before. No signs of federal layoffs causing the rise, yet.
- The S&P 500 is historically expensive in 19 out of 20 metrics tracked by Bank of America Global Research.
A Bifurcated Economy Heightens Affordability Issue -
Moody’s Analytics recently published showing the bifurcation that is expanding in our current economy around consumer spending and savings. The report reveals that lower-income households have become exhausted by high prices and stubborn inflation, while the top 10% of earners - households making about $250,000 a year or more - are splurging, buoyed by big gains in stocks, real estate and other assets.
In layman's terms we are looking at the classic "Haves vs The Have Nots" or as I heard the other day "The Have Yachts vs The Have Nots". This issue in my opinion is creating the "home-affordability issue" especially for "First-Time Homebuyers." While the upper income earners can afford to buy homes, you need all segments to be in the same position.
Here's why - you need "First-Time Homebuyers" to be able to afford to buy the home of the "Move Up Buyers" to unlock the equity for the "Move Up Buyers" to buy a new home. In addition, most "Move-Up Buyers" can't afford to carry two mortgages. Thus, if you don't have a large segment of people that can buy their homes as "First Time Homebuyers" it all starts to somewhat cave-in. Fewer buyers typically leads to lower sales prices as well.
See this graph of Housing Affordability -
Spring Housing Buying Season Kicks of With Lower Rates and More Inventory -
If you are looking to buy a home this Spring you have two things working in your favor - lower recent rates and more homes from which to choose.
“Mortgage rates decreased to their lowest level in over two months,” Freddie Mac’s Chief Economist Sam Khater said in a statement. “The drop in mortgage rates, combined with modestly improving [housing] inventory, is an encouraging sign for consumers in the market to buy a home.”
This spring, buyers may face a friendlier housing market.
Home prices remain high, but even small drops in rates can boost the buying power of home shoppers. A drop in rates can also result in smaller monthly mortgage payments.
“Lower rates could give the housing market the shot in the arm that it so desperately needs,” Lisa Sturtevant, chief economist of Bright MLS, said in a statement. The multiple listing service covers the mid-Atlantic region.
In addition, buyers are finding more homes on the market to choose from. The number of home listings was up 27.5% year-over-year in February, according to Realtor.com data.
That’s allowing buyers to be choosier—and leading to more sellers cutting prices to be competitive. The number of price reductions increased 30.2% year-over-year in February, according to Realtor.com data.
Those savings, in addition to lower mortgage rates, may help buyers stretch their budgets.
“It seems likely that rates will fall in the weeks ahead, though they are not expected to come down significantly,” Sturtevant said. “Consumers should accept rates that are volatile week-to-week, but that are gradually moving lower.”
As I have been saying real estate is returning to being "Local". That means while home prices may be lower in some areas, they could be higher or rising in other areas. We continue to move away from a "National - Everything Moves Together" housing market.
Typically If You Follow Inflation You Know the Direction of Interest Rates
Great Time to Rent an Apartment -
There are many reasons to rent an apartment in life - I'm not a Home-Ownership "Maximalist". Just got out of college, short-term assignment, just got divorced, lots of reasons. If you are someone that apartment living is the best-current situation for you - than you should be very happy.
All those apartment complexes that they built and are still building - well maybe they overshot their projections. Now with so many units they have to compete for clients with "Move-In Specials", usually in the currency of "Free Rent". For example, here is a complex offering 3 months of free rent.
I checked around some of the Austin and Houston area apartment complexes and it is happening here as well. Hey saving 3 months rent is a great way to start a savings fund for a future down-payment when you are ready to buy a home.
Final Thoughts -
Like the Texas Baseball team - let's hope lower rates continue their streak. Great to see Texas at 8-1 and put Texas Tech in their place.
Any race NASCAR Fans on OB - I'll be out at the Circuit of the Americas cheering on my company's #47 - thanks to my regional manager for hooking me up with the Race Team for VIP Pit Passes. Heading out there now.
Fast Cars & Fast Closings/High Speeds & Low Rates with a Winning Team!
Always here to answer question ITT or send me a DM.
Also if there are any topics you would like addressed in an upcoming "Weekly Housing & Real Estate Market Thread" let me know.
Hook Em!
MH
