Both the 10yr and the 5.5% 30MBS have broken through their 200 day moving averages and it looks like they are wanting to improve even further. What stands between us and further improvement can be employment news today and tomorrow. We have the unemployment number Thursday and the March jobs report on Friday. Given the data we have seen reported earlier this week from ADP, if unemployment claims go higher and the jobs report on Friday shows weakening, the bond market could see more space to improve.
While I don’t think we can see a massive move, weaker numbers can help sustain this rally and could very well lead us to the FED pausing rate increases and signal inflation is coming under control from previous rate hikes. We all know that these rate hikes take about a year to fully impact the markets, and the first hike was just a little more than a year ago, so we are just starting to see results. Hopefully, the FED will look at all the data and come to the conclusion that further rate hikes are not needed at this time, and wait to see how the next few months play out before making any moves.
Activity levels vary widely in the housing markets. It is important to look at your local markets for information because the national numbers, and those who interpret them, may not be doing your specific market justice with their outlooks. When you get deeper into the numbers, not all markets are acting the same. Inventory issues are driving much more of the market than interest rates. People want to buy, it’s just that the annual increases in listing we normally see in the first quarter of the year have yet to materialize. Maybe it’s because people aren’t ready to sell, or that they are waiting for other factors to come together. But I do know that while loan applications and contracts may be lower than anticipated, pre-approvals remain strong for those wanting to get out and buy!
So watch the news Thursday and Friday morning and follow the reaction by the mortgage markets and how they respond. PLEASE IGNORE the talking heads in the mainstream media and all the social media “gurus”, they spin news for CLICKS, not for CLIENTS!
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Limited new listings are making it feel like a seller’s market in some parts of the U.S. even though sales are down by double digits. Some markets still feel cool.
Although elevated mortgage rates continue to dampen homebuying demand, low inventory means home are selling fast in some parts of the country, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The pool of homes available to buyers is shrinking quickly. That’s mainly because new listings are scarce. New listings fell 21.8% from a year earlier nationwide during the four weeks ending April 2, one of the biggest drops since the start of the pandemic, contributing to an unseasonal early-spring decline in the total number of homes for sale. Many homeowners are staying put because they’re unwilling to give up their low mortgage rate. Although average 30-year mortgage rates posted their fourth-straight decline this week, dropping to 6.28%, that’s more than double the sub-3% rates common in 2021.
Buyers are snapping up the homes that do hit the market fast. Of the homes going under contract, nearly half are doing so within two weeks. That’s up from about one-quarter at the start of the year, an unusually quick winter increase. It would take 2.8 months for today’s supply of for-sale homes to sell at homebuyers’ current consumption rate, the shortest time since September. That’s a sharp drop from the three-year high of 4.5 months in late January and it marks the fastest winter decline in months of supply since at least 2015, in percentage terms. It’s up from a near-record-low of 1.9 months a year ago.
Still, pending home sales are down 19% year over year, nearly as much as new listings. That’s partly because homebuying demand is lower than it was last year and partly because so few homes are hitting the market.
“Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers. Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow,” said Redfin Deputy Chief Economist Taylor Marr. “Today’s serious homebuyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly. The lack of homes hitting the market explains why the market is moving fast even though sales are still down. The lack of new listings is also one reason why sales are down: Buyers can’t buy if sellers don’t want to sell.”
While new listings are down in every major U.S. metro, the trend is more drastic in some areas. In Denver, where new listings are declining at roughly the same pace as the national drop and there are just 1.6 months of supply, Redfin agent Stephanie Collins said sellers have the upper hand as long as their home isn’t overpriced.
“Shiny new listings are getting multiple offers and selling fast. The caveat is that they have to be priced correctly from the beginning,” Collins said. “One of my buyers recently made an offer on a move-in ready home in a popular area. The home was priced right in line with the market at $520,000; it received eight offers and went for $560,000 to a competing buyer. That same client just had an offer $35,000 over asking price accepted in the same neighborhood. Sellers are hesitant, partly because it’s not spring 2022 anymore. I’m reminding potential sellers that buyers are out there, and some homes have bidding wars—they just need to price a bit lower than they would have a year ago.”
In Austin, a pandemic homebuying hotspot, buyers can take their time and they have a better chance of getting a home under list price. Inventory is piling up—Austin has 4.4 months of supply, more than almost anywhere in the country—and prices are down nearly 15% year over year, more than any other metro.
“Buyers have more power right now. The silver lining of high rates and the slow market we’ve been experiencing here is that some locals are able to buy in neighborhoods they couldn’t have gotten into last year and get contingent offers with small down payments accepted,” said Austin Redfin agent Andrew Vallejo. “But attractive homes that are priced competitively are selling quickly. Sellers are starting to notice, and they’re prepping and pricing their homes accordingly. I think we’ll start to see more listings over the next several months.”
Home Prices Falling in Many Metros, Rising in Others
Home prices dropped in more than half (28) of the 50 most populous U.S. metros, with the biggest drop in Austin, TX (-14.7% YoY). Next come four West Coast metros: Sacramento (-11.7%), Oakland, CA (-10.4%), San Jose, CA (-10.2%) and Seattle (-9.6%). That’s the biggest annual decline since at least 2015 for Seattle.
On the other end of the spectrum, sale prices increased most in Milwaukee, where they rose 11.4% year over year. Next come Fort Lauderdale, FL (8.9%), West Palm Beach, FL (8.2%), Miami (7.9%) and Columbus, OH (6.3%).
On a national level, the median U.S. home-sale price fell 2.1% year over year to roughly $362,000, marking the seventh straight week of declines after more than a decade of increases.
Leading indicators of homebuying activity:
Key housing market takeaways for 400+ U.S. metro areas:
Unless otherwise noted, this data covers the four-week period ending April 2. Redfin’s weekly housing market data goes back through 2015.
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-scarce-new-listings-fast-market
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