This Week in Real Estate
Good Morning!
The summer selling season nears as inventory grows while the pace
of sales return to pre-COVID conditions. According to Realtor.com This
Week in Real Estate the supply of homes for sale jumped 9% last week
compared to the same time period a year ago. Below are a few newsworthy
events from the fourth week of May that influence our business:
* Home Listings
Suddenly Jump As Sellers Worry They May Miss Out On The Red-Hot Housing Market.
Sharply higher mortgage rates have caused a sudden pullback in
home sales, and now sellers are rushing to get in before the red-hot market
cools off dramatically. The supply of homes for sale jumped 9% last week
compared with the same period a year ago, according to Realtor.com. That is the
biggest annual gain the company has recorded since it began tracking the metric
in 2017. Sellers clearly see the market softening. Pending home sales, a
measure of signed contracts on existing homes, dropped nearly 4% in April from
March. They were down just over 9% from April 2021, according to the National
Association of Realtors. This index measures signed contracts on existing
homes, not closings, so it is perhaps the most timely indicator of how buyers
are reacting to higher mortgage rates. Sales are slowing because mortgage rates
have risen sharply since the start of the year, with the biggest gains in April
and early May. The average rate on the 30-year fixed mortgage started the year
close to 3% and is now well over 5%.
* Lowest Rates In
More Than A Month. Mortgage
rates have generally been moving
lower for more than 2 weeks now. Today's gains were enough to bring them to
their best levels in just over a month. We've been saying this for many weeks:
the higher rates go, the more momentum builds in the other direction and the
closer we are to finding a ceiling. Whether or not we've found a ceiling
remains to be seen. The biggest issue for rates has been and will
continue to be inflation. It has to level off and cool down in order for rates
to truly confirm their ceiling. It will take time for inflation data to allay
the market's fears. Until then, even though rates have had a great couple of
weeks, it's easier to argue for a volatile range that looks more sideways than
lower in the big picture.
Full Story… https://www.mortgagenewsdaily.com/markets/mortgage-rates-05242022
* Good News For Home
Buyers? Fannie Mae Chief Economist Says The U.S. Housing Market Has Finally
Turned A Corner. The inventory shortage, high prices and rising interest rates have
finally bitten. Mortgage rates have risen 200 basis points since the end of
2021, putting pressure on existing home sales, mortgage applications, and
homebuilder confidence, he said. “The sales pace in April was similar in level
to the slowdown that occurred the last time the Federal Reserve engaged in a
tightening regimen in 2018,” he added. A separate report released
Tuesday by Realtor.com suggested that people are prepared to buy and sell homes
at ”more approachable price points.” George Ratiu, senior economist and manager
of economic research at Realtor.com, said the report “offers hope” for
seller-buyers.
Have a productive week.
Jason
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