Thursday, February 23, 2023 / by Barbara Oleska
The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.”
Let’s break down these two big issues in today’s housing market.
According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
When so many homeowners are rate locked and reluctant to sel. ...
Thursday, January 12, 2023 / by Barbara Oleska
Well, here we are in 2023! I hope your year has gotten off to a happy and healthy start!
Everybody is wondering where the real estate market is going for 2023. Below is the Housing Outlook For 2023, provided by Brian S Wesbury, Chief Economist Of First Trust Investments, along with Robert Stein, Deputy Chief Economist, that I thought you might find interesting. I am always here to answer any questions you might have whether it's about buying, selling, or investing in properties.
The Housing Outlook for 2023
The housing sector was a huge and early beneficiary of the super-loose monetary policy of 2020-21. But, once the Fed started tightening, housing took the lead downward, as well. This isn’t a repeat of the 2006-11 housing bust, but it will drag on. Don’t expect any real recovery in housing until at least late 2023 or early 2024. Home sales and prices will continue to drag in 2 ...
Thursday, October 6, 2022 / by Barbara Oleska
If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.
Inflation and the Housing Market
This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.
While the Federal Reserve is working hard to lower inflation, the August data shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate says:
“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy tha. ...
Friday, February 4, 2022 / by Barbara Oleska
Mortgage rates have increased significantly since the beginning of the year. Each Thursday, Freddie Mac releases its Primary Mortgage Market Survey. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. The table below gives you an idea of how rising mortgage rates impact your purchasing power. This is important if you are buying because if prices continue to rise, you may be priced out from your desired home or at least find the payment more painful.
How Can You Know Where Mortgage Rates are Headed?
Everyone wishes they had a crystal ball...while it’s always difficult to know exactly where mortgage rates will go, a great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of t. ...