Monthly Market Metrics | 08.2023
According to Zillow, nearly a quarter of homeowners say they are considering selling their home in the next three years or have already listed it, a significant increase from a year ago.
Homeowners with an interest above 5% are twice as likely to say that they will sell their home compared to those with rates below 5%- Zillow Group Population Science’s Quarterly Survey of Homeowner Intentions and Preferences (QSHIP)
Source: https://www.zillow.com/research/rate-lock-selling-32907/
Last year inflation peaked at 7% but based on the latest Personal Consumption Expenditures (PCE), it is now at 3%, which is still up there but much improved. This means that we could see lower costs on some goods and services, but it could also help mortgage bonds and lower mortgage rates over time.
Source: https://www.bea.gov/news/2023/personal-income-and-outlays-june-2023
Since March of last year, the Fed has increased the Fed Funds Rate 11 times including the hike from last Wednesday. The Fed Funds Rate is the interest rate for overnight borrowing for banks. Mortgage rates don’t mirror the Fed Funds Rate. They tend to track the 10-year treasury yield, however, mortgage lenders consider what the fed is doing, along with the rate of inflation, supply and demand and the secondary mortgage market when setting fixed rates.
Fed Chair Jerome Powell wouldn’t say whether they planned to increase rates again at the next meeting in September.
Pending Home Sales rose 0.3% from May to June. This was the first increase since February. Sales are down 16% from a year ago but this is largely due to a lack of inventory. Pending Home Sales measures signed contracts on existing homes, which is about 90% of the market and is considered a forward-looking indicator of home sales.
Lawrence Yun, chief economist for the National Association of REALTORS (NAR), explained, “The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers.” If we had more homes for sale, we would have a higher rate of signed contracts!
Source: https://www.nar.realtor/newsroom/pending-home-sales-rose-0-3-in-june-first-increase-in- four-months
Report Provided by Mark Thatcher
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Email: mark.thatcher@fairwaymc.com
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