This Week In Real Estate – February 13, 2022.
As inflation hits a 40-year high and the Consumer Price Index (CPI) reaches its highest number in decades, mortgage interest rates respond as expected. Freddie Mac’s chief economist, Sam Khater, said this week in real estate, that “the normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic.” Below are a few newsworthy events from the second week of February that influence our business:
Homes Are Selling Faster Than Ever Before, And The Spring Market Is Just Around The Corner.
Total supply and new listings are at record lows, and that means that what is on the market now is selling fast. Really fast. The average home spent just 61 days on the market, according to a January reading from Realtor.com. That is the fastest pace Realtor.com has recorded since it began tracking the metric in 2016. It’s 10 fewer days than at the rate recorded in January 2021 and 29 fewer than the 2017-20 pace. Home prices continue to rise at a fast pace, and in fact, the gains in prices are still increasing. The expectation is that prices will cool as the number of sales drops. Homes are selling faster now, but fewer homes are selling, due to that short supply. Builders are also actively slowing sales of their own homes to make sure they can deliver them on time. Full Story…
Mortgage Rates Jump To 3.69% As Economy Normalizes.
The average 30-year-fixed rate mortgage climbed to 3.69% for the week ending Feb. 3, up eight basis points from the previous week. It’s the highest level since the start of the pandemic, according to the latest Freddie Mac PMMS Mortgage Survey. “The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in a statement. Most economists believe rates will climb in the months ahead – but will still be close to record-low levels. The Mortgage Bankers Association (MBA) forecasts that 30-year mortgage rates will reach 4% by the end of 2022. “With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Federal Open Markets Committee said in a statement. Full Story…
Highest Inflation Since The 80s; Highest Rates Since 2019; Huge Volatility On Friday.
The week’s biggest economic data–the Consumer Price Index (CPI)–was released, and chaos ensued. The median forecast among economists called for a fairly big increase to CPI with the more important “core” component (which excludes food and energy) rising from 5.5% to 5.9% in January. Traders felt this number was a bit too high, and were hoping to see something under 5.9%. CPI did not come in under 5.9%. It actually came in 0.1% higher at 6.0–the highest number in decades. This made a bad situation worse for mortgage rates as the average 30yr fixed had just crested 4% for the first time since May 2019 on Thursday. Full Story…
Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.
