Things are really getting interesting as the CPI inflation numbers continue their downward trajectory. The various economy metrics we like to track in this newsletter have been favorable in recent weeks. We can see that reflected in the rapid decline of the 10 year treasury yield. That is our main indicator to help track where the 30 year mortgage rate is going. The 10 year was just two weeks ago touching 5%, and as of today we have broken below 4.5%. On top of that, the projections for a Fed Funds rate increase in December has crashed from a probability of 30% to 0%. Mortgage rates should respond in kind. Will we see fluctuations? Of course, but my hope and the most welcome change would be a lack of volatility in the mortgage rate market. This will help real estate participants become more comfortable with their estimates and numbers. It has been common in recent months for a buyer to wake up not being able to afford the house they wanted to make an offer on, or were already in contract and they didn't do a rate lock!
On to the 3rd week market update numbers. There's a few more homes on the market then the previous month, but nothing crazy. There still aren't a lot of options out there, but the ones that are out there have been sticking around awhile and would probably take a lower offer, be open to a seller credit or a rate buydown scenario. Otherwise, they may be closing up shop soon choosing to wait until Spring to relist. I'm advising my clients interested in selling to take their time if they can and list around February.
If you're really paying attention you'll notice a few other things going on with these MoM (month over month) numbers. Closed sales in last month's newsletter saw a double digit decline, and these October numbers cut that in half. This is the same with pending sales. Both are still declining, but not as quickly, which implies some home buying activity. This makes sense as the average days on market has stalled at 24 days. Other numbers not shown here have picked up as well...mortgage applications. We saw this play out last year, and we are likely to see it play out again. Rates come down, applications go up and a recipe for strong buyer competition in the Spring brews. What are you seeing or hearing? I'd love to know firstname.lastname@example.org