Bonds (and by extension mortgage rates) continue to confound, perplex and confuse (yes…all of those) economists as rates keep dropping in the face of record inflation.
|July 9-15||Prev 4 Week Avg.||% Change||July 2-8|
|New Pending Sales||870||847||2.78%||704|
|30 Year Fixed Mortgage||2.88%||2.96%||-2.62%||2.9%|
That pesky inflation number came in at 5.4% for June, above economist’s already high expectations.
The evidence exists within the details of that report that this can (and likely is) temporary.
In fact, concerns over future deflationary pressure might actually be more nefarious and may be playing a bigger factor than mainstream media gives credit to. Check out this super interesting article, if you dare.
Still, when it comes to the economy, facts matter less than perception. Perception is reality for people, and those perceptions drive emotions, and emotions drive buying behavior which drives the economy. Funny how that works.
As a result, consumer confidence numbers for early July fell sharply and unexpectedly as a result. People are feeling the pinch. Consumer confidence can correlate with homebuyer demand, so it’s worth paying attention to.
If you’re less concerned about the why you can simply focus on the result: mortgage rates remain near record lows, and it looks like that will continue at least through the summer.
This is great news for buyers as long as their confidence doesn’t take a dive.
The trend of rising inventory that started in early May continued for another week. If more sellers continue to come out of the woodworks to list their homes and mortgage rates stay low, we may actually get to experience a balanced market (at least for a bit) later this year.
And in case you missed it, check out last week’s June round-up and my best attempt to forecast ahead for San Diego real estate.
- California passes the US’s first state-backed guaranteed income plan.
- San Diego County tries to tackle the housing shortage by updating a decades-old general plan.
- Fannie and Freddie drop COVID-era mortgage refinance fee, reducing borrower costs.
- Economically speaking there isn’t much to write about this week. Markets will primarily be paying attention to Q2 earning announcements from the big players. These aren’t expected to have much impact on rates or real estate values…but these days you never know!