Hi again 👋
I’m honored you’re here.
If you ever have any questions or comments for me, please don’t hesitate to reply directly to this email. I’m here to serve.
Let’s dive right in…
As I teased last week, the big news this week has been all about mortgage rates.
|Sept. 24-30||Prev 4 Week Avg.||% Change||Sept. 17-23|
|New Pending Sales||746||792||5.75%||817|
|30 Year Fixed Mortgage||3.01%||2.87%||4.79%||2.88%|
Mortgage rates had the biggest single-week jump since February, primarily as a reaction to the Fed’s meeting where they announced the likely start of their bond purchases before the end of this year.
The good news is that the spike in rates calmed down in the latter half of last week.
The bad news, inflation is stickier than the Fed has hoped for, which is another bad sign for bonds and adds more pressure to the higher side for mortgage rates. Check this out:
There is a lot of conflicting pressure on rates right now so making bold predictions is a fool’s errand. The best thing we can do is watch the news closely and break down the market’s reaction until we get a more clear picture.
We watch mortgage rates closely because there isn’t anything more influential on overall homebuyer demand. As rates go up, demand will fall because fewer buyers can afford the newly inflated home prices. Like any other free market, home prices are just the result of the supply and demand for homes.
The other big news, at least for us here in San Diego, relates to the other side of the supply and demand equation….the pace at which housing inventory is drying up (again). We’ve been above 3,000 homes for sale (which is still incredibly low in the grand scheme of things) since June 1st. We’re now very close to falling under that threshold again.
The result? This recent mortgage rate increase will impact demand, but it will take time to feel that. The inventory shortage is happening in real-time, and bidding wars are back in style in many pockets around the county. That trend appears to be growing.