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Mortgage Rate Dip
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) for the week ending August 4th, showing that the 30-year fixed-rate mortgage (FRM) averaged 4.99 percent.
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” said Sam Khater, Freddie Mac’s Chief Economist. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
- 30-year fixed-rate mortgage averaged 4.99 percent with an average 0.8 point as of August 4, 2022, down from last week when it averaged 5.30 percent. A year ago at this time, the 30-year FRM averaged 2.77 percent.
- 15-year fixed-rate mortgage averaged 4.26 percent with an average 0.6 point, down from last week when it averaged 4.58 percent. A year ago at this time, the 15-year FRM averaged 2.10 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent with an average 0.3 point, down from last week when it averaged 4.29 percent. A year ago at this time, the 5-year ARM averaged 2.40 percent.
For information on daily interest rate movements, check with your mortgage lender. You may also find daily mortgage interest rate information online on sites such as Mortgage News Daily.
Here’s Why It’s Still A Seller’s Market
As there’s more and more talk about the real estate market cooling off from the peak frenzy it saw during the pandemic, you may be questioning what that means for your plans to sell your house. If you’re thinking of making a move, you should know the market is still anything but normal.
Even though the supply of homes for sale has been growing this year, there’s still a shortage of homes on the market. And that means conditions continue to favor sellers today. That’s because the level of inventory of homes for sale can help determine if buyers or sellers are in the driver’s seat. Think of it like this:
- A buyers’ market is when there are more homes for sale than buyers looking to buy. When that happens, buyers have the negotiation power because sellers are more willing to compromise so they can sell their house.
- In a sellers’ market, it’s just the opposite. There are too few homes available for the number of buyers in the market and that gives the seller all the leverage. In that situation, buyers will do what they can to compete for the limited number of homes for sale.
- A neutral market is when supply is balanced and there are enough homes to meet buyer demand at the current sales pace.
And for the past two years, we’ve been in a red-hot sellers’ market because inventory has been near record lows. The blue section of this graph highlights just how far below a neutral market inventory still is today.
What Does This Mean for You?
Ed Pinto, Director of the American Enterprise Institute’s Housing Center, gives a perfect summary of what’s happening in today’s market, saying:
“Overall, the best summary is that we’ll move from a gangbuster sellers’ market to a modest sellers’ market.”
Conditions are still in your favor even though the market is cooling. If you work with an agent to price your house at market value, you’ll find success when you sell your house today. While buyer demand is softening due to higher mortgage rates, homes that are priced right are still selling fast. That means your window of opportunity to list your house hasn’t closed.
Bottom Line
Today’s housing market still favors sellers. If you’re ready to sell your house, let’s connect so you can start making your moves.
This article provided by Keeping Current Matters. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Buying a Home May Make More Financial Sense Than Renting One
If rising home prices leave you wondering if it makes more sense to rent or buy a home in today’s housing market, consider this. It’s not just home prices that have risen in recent years – rental prices have skyrocketed as well. As a recent article from realtor.com says:
“The median rent across the 50 largest US metropolitan areas reached $1,876 in June, a new record level for Realtor.com data for the 16th consecutive month.”
That means rising prices will likely impact your housing plans either way. But there are a few key differences that could make buying a home a more worthwhile option for you.
If You Need More Space, Buying a Home May Be More Affordable
What you may not realize is that, according to the latest data from realtor.com and the National Association of Realtors (NAR), it may actually be more affordable to buy than rent depending on how many bedrooms you need. The graph below uses the median rental payment and median mortgage payment across the country to show why.
As the graph conveys, if you need two or more bedrooms, it may actually be more affordable to buy a home even as prices rise. While this doesn’t take into consideration the interest deduction or other financial advantages that come with owning a home, it does help paint the picture that it may be more affordable to buy then rent for that unit size based on nationwide averages. So, if one of the factors motivating you to move is a desire for more space, this could be the added encouragement you need to consider homeownership.
Homeownership Also Provides Stability and a Chance To Grow Your Wealth
In addition to being more affordable depending on how many bedrooms you need, buying has two other key benefits: payment stability and equity.
When you buy a home, you lock in your monthly payment with your fixed-rate mortgage. And that’s especially important in today’s inflationary economy. With inflation, prices rise across the board for things like gas, groceries, and more. Locking in your housing payment, which is likely your largest monthly expense, can provide greater long-term stability and help shield you from those rising expenses moving forward. Renting doesn’t provide that same predictability. A recent article from CNET explains it like this:
“…if you buy a house and secure a fixed-rate mortgage, that means that no matter how much prices or interest rates go up, your fixed payment will stay the same every month. That’s an advantage over renting since there’s a good chance your landlord will raise your rent to counter inflationary pressures.”
Not to mention, when you buy, you have the chance to build equity, which in turn grows your net worth. It works like this. As you pay down your home loan over time and as home values continue to appreciate, so does your equity. And that equity can make it easier to fuel a move into a future home if you decide you need a bigger home later on. Again, the CNET article mentioned above helps explain:
“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home that you can tap into later on. When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage.”
Bottom Line
If you’re trying to decide whether to keep renting or buy a home, let’s connect to explore your options. With home equity and a shield against inflation on the line, it may make more sense to buy a home if you’re able to.
This article provided by Keeping Current Matters. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Three Reasons To Buy a Home in Today’s Shifting Market
![Three Reasons To Buy a Home in Today’s Shifting Market [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2022/07/28132341/20220729-MEM-1046x1709.png)
Some Highlights
- The housing market is moving away from the frenzy of the past year and it’s opening doors for you if you’re thinking about buying a home.
- Housing inventory is increasing, which means more options for your search. Plus, the intensity of bidding wars may ease as buyer demand moderates, leading to fewer homes selling above asking price.
- If you’re ready to buy a home, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.
Want To Buy a Home? Now May Be The Time
Are you one of those potential homebuyers who is struggling with whether now is a good time to buy. You’ve been reading the news reports and hearing conflicting things from friends, relatives and others about whether you should buy now or wait. When I get the question – should I buy now or wait – I try to learn more about the person or couple’s desire to find a new place. I also ask them about what steps they’ve taken to prepare themselves to buy.
And that conversation leads us to why now may be the time to buy.
There are more homes for sale today than at any time last year. So, if you tried to buy a home last year and were outbid or out priced, now may be your opportunity. The number of homes for sale in the U.S. has been growing over the past four months as rising mortgage rates help slow the frenzy the housing market saw during the pandemic.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains why the shifting market creates a window of opportunity for you:
“This is an opportunity for people with a secure job to jump into the market, when other people are a little hesitant because of a possible recession. . . They’ll have fewer buyers to compete with.”
Two Reasons There Are More Homes for Sale
The first reason the market is seeing more homes available for sale is the number of sales happening each month has decreased. This slowdown has been caused by rising mortgage rates and rising home prices, leading many to postpone or put off buying. The graph below uses data from realtor.com to show how active real estate listings have risen over the past four months as a result.
The second reason the market is seeing more homes available for sale is because the number of people selling their homes is also rising. The graph below outlines new monthly listings coming onto the market compared to last year. As the graph shows, for the past three months, more people have put their homes on the market than the previous year.
Bottom Line
The number of homes for sale across the country is growing, and that means more options for those thinking about buying a home. This is the opportunity many have been waiting for who were outbid or out priced last year.
This article provide by Keeping Current Matters. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Opportunity for Homebuyers?
he latest date from Federal government agencies continues to show a slowdown in the housing market. The US Census Department and HUD reported today sales of new single family homes in June fell 8,1 per cent from the previous month of May. The report said that new single-family home sales were down 17.4 per cent from June of 2021.
Mounting evidence shows a slowdown in housing market activity. Is this a reason for pause? Or, does it represent a window of opportunity?
Mortgage rates are much higher today than they were at the beginning of the year, and that’s had a clear impact on the housing market. As a result, the market is seeing a shift back toward the range of pre-pandemic levels for buyer demand and home sales.
But the transition back toward pre-pandemic levels isn’t a bad thing. In fact, the years leading up to the pandemic were some of the best the housing market has seen. That’s why, as the market undergoes this shift, it’s important to compare today not to the abnormal pandemic years, but to the most recent normal years to show how the current housing market is still strong.
Higher Mortgage Rates Are Moderating the Housing Market
The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s also a good indication of buyer demand over time. Here’s a look at their data going back to 2017 (see graph below):
Here’s a breakdown of the story this data tells:
- The 2017 through early 2020 numbers (shown in gray) give a good baseline of pre-pandemic demand. The steady up and down trends seen in each of these years show typical seasonality in the market.
- The blue on the graph represents the pandemic years. The height of those blue bars indicates home showings skyrocketed during the pandemic.
- The most recent data (shown in green), indicates buyer demand is moderating back toward more pre-pandemic levels.
This shows that buyer demand is coming down from levels seen over the past two years, and the frenzy in real estate is easing because of higher mortgage rates. For you, that means buying your next home should be less challenging than it would’ve been during the pandemic because there is more inventory available.
Higher Mortgage Rates Slow the Once Frenzied Pace of Home Sales
As mortgage rates started to rise this year, other shifts began to occur too. One additional example is the slowing pace of home sales. Using data from the National Association of Realtors (NAR), here’s a look at existing home sales going all the way back to 2017. Much like the previous graph, a similar trend emerges (see graph below):
Again, the data paints a picture of the shift:
- The pre-pandemic years (shown in gray) establish a baseline of the number of existing home sales in more typical years.
- The pandemic years (shown in blue) exceeded the level of sales seen in previous years. That’s largely because low mortgage rates during that time spurred buyer demand and home sales to new heights.
- This year (shown in green), the market is feeling the impact of higher mortgage rates and that’s moderating buyer demand (and by extension home sales). That’s why the expectation for home sales this year is closer to what the market saw in 2018-2019.
Why Is All of This Good News for You?
Both of those factors have opened up a window of opportunity for homeowners looking to move and for buyers looking to purchase a home. As demand moderates and the pace of home sales slows, housing inventory is able to grow – and that gives you more options for your home search.
So don’t let the headlines about the market cooling or moderating scare you. The housing market is still strong; it’s just easing off from the unsustainable frenzy it saw during the height of the pandemic – and that’s a good thing. It opens up new opportunities for you to find a home that meets your needs.
Bottom Line
The housing market is undergoing a shift because of higher mortgage rates, but the market is still strong. If you’ve been looking to buy a home over the last couple of years and it felt impossible to do, now may be your opportunity. Buying a home right now isn’t easy, but there is more opportunity for those who are looking.
This article includes reporting by Keeping Current Matters. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Have You Stopped Searching?
![Great News About Housing Inventory [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2022/07/21111905/20220722-MEM-1046x2035.jpg)
Some Highlights
- Experts say the number of homes for sale is growing this year, and that can have a big impact on your move.
- If you’re planning to buy, additional options in today’s market may be just what you’ve been waiting for. More inventory means added opportunities to find the home of your dreams.
- Let’s connect so you have the latest information on available homes in our area.
This article provided by Keeping Current Matters. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Mortgage Interest Rates Inch Up For The Week Ending July 21, 2022
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) for the week ending July 21, 2022. The survey showed the 30-year fixed-rate mortgage (FRM) averaged 5.54 percent for the week.
“The housing market remains sluggish as mortgage rates inch up for a second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “Consumer concerns about rising rates, inflation and a potential recession are manifesting in softening demand. As a result of these factors, we expect house price appreciation to moderate noticeably.”
- 30-year fixed-rate mortgage averaged 5.54 percent with an average 0.8 point as of July 21, 2022, up from last week when it averaged 5.51 percent. A year ago at this time, the 30-year FRM averaged 2.78 percent.
- 15-year fixed-rate mortgage averaged 4.75 percent with an average 0.8 point, up from last week when it averaged 4.67 percent. A year ago at this time, the 15-year FRM averaged 2.12 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.31 percent with an average 0.3 point, down from last week when it averaged 4.35 percent. A year ago at this time, the 5-year ARM averaged 2.49 percent.
For more information on daily mortgage interest rate movements, check with your mortgage lender. You can also check online sites such as Mortgage News Daily.
